From teabags to e-shopping, time-savers will make money

Helping consumers improve their personal productivity can be very difficult, but for marketers, cutting queues can be the first step on a lucrative path.

According to research by Visa, UK consumers spend 273 days of their life in queues: that’s between ten and 20 minutes a day. We don’t know whether things are getting better or worse, because there isn’t much comparable research around. But a startling figure like this does beg a question: how big a marketing opportunity does it represent?

Expand the frame a little, from queues to better use of time generally, and the answer is “huge”, as a quick look at marketing history demonstrates. Take the humble teabag. This simple innovation transformed the tea market even though it didn’t improve the actual taste of the tea – the “content” of the product. Instead, it improved the processes consumers had to go through to get their cuppa and won their hearts by doing so. In the case of instant coffee, consumers were even prepared to trade product quality for extra convenience.

Time trading works in many ways. Sometimes, consumers take on more work to save money, as per Ikea self-assembly furniture. Sometimes, they pay more to save time. Here, the ideal innovation improves both “content” and “process”. Disposable nappies improved the child’s comfort while massively reducing unpleasant, time-consuming work for the parent. The mobile phone is much more convenient than a landline phone, but also offers useful extras such as texting. Such double whammies invariably sweep particular markets, transforming marketing landscapes along the way.

Back in the 1960s and the 1970s, a twin innovation – the automatic washing machine plus the associated washing powders – revolutionised the amount of time and effort women (mostly) had to invest in clothes cleaning. Given the back-breaking, time-consuming nature of this task, it is not surprising soap powders came to be icons of marketing.

food becomes faster

Convenience foods are another market-transforming time-related innovation trajectory. A few decades ago, most consumers were still buying unwashed vegetables in bulk and preparing meals from raw ingredients. Then came a whole spate of innovations. Pre-washed vegetables. Pre-prepared packs, such as ready-to-eat salads in the bag. “Just heat” and “just eat” fast food. Over decades, the food industry has helped individuals outsource so much work that (also according to Visa’s research) average household food preparation time has fallen from an hour a day in the 1980s to about 13 minutes a day now. Over a lifetime, that’s about two years saved.

History suggests, then, that any marketer who can offer better use of time to customers is on to a winner. So where next, then?

Information technology is obviously one huge opportunity. Whether it’s MP3 music players or self-service internet banking, the twin attractions of technology-enabled control and convenience are changing markets as surely as the teabag and instant coffee did theirs. But at a certain stage, simply embedding “more time saving” into a product becomes harder and harder. New divisions of labour need to be negotiated between producer and consumer. And that means new business models.

Internet grocery shopping provides a classic example. At a certain point, improving the store (better locations, bigger car parks, more check-out tills) wasn’t enough to meet certain customers’ demand for better use of time, so the whole caboodle had to be redesigned – and the real complexities of time trading emerged for all to see.

Home shopping transfers to the retailer work previously done by the consumer for nothing (such as travelling to and from the store and picking items). As long as this work was done free by consumers, it didn’t register on retailers’ profit and loss accounts. Then suddenly it did. With a vengeance. That created a complex new equation which not only involved very different cost structures, but also different value perceptions. While consumers were keen to outsource the work to someone else, they were not prepared to pay the full economic cost of doing so.

(Queues are another case in point. They represent a cost to the consumer that does not register in the accounts of the provider. This makes it very easy for providers not to see the problem. If providers had to pay, say, 50p a minute to every customer being forced to queue, queue lengths would shorten dramatically. On the other hand, sometimes customers are prepared to pay extra to avoid queues. Look at the success of special queue-jumping tickets in US theme parks, for instance.)

A further complexity for time trading is that different customers have different perceptions of the value of time. According to Visa’s Understanding Everyday research (conducted with the Future Foundation) most of us start getting “seriously annoyed” if we have to wait in line for more than 13 minutes. But for ten per cent of us the mere existence of any queue at all is a trigger for instant fury. If that ten per cent represents the proverbial cash-rich, time-poor customer, that is a serious problem for service providers.

Even further complexities are thrown up by new divisions of labour between producers and consumers. Changing processes involves transfers of skill, knowledge and information as well as labour, as retailers offering online grocery shopping discovered to their cost when it came to substituting items that were out of stock. If an item is out of stock, shoppers instantly know whether an alternative is acceptable. Making this implicit knowledge explicit, and transferring it from shopper to retailer, is a hurdle home shopping hasn’t yet cleared. This thorn in the side of home shopping is forcing providers to rethink their own internal processes even further in order to avoid the substitution problem by reducing out-of-stocks.

Queues represent a misalignment of customer and provider processes: the way one side does things adds cost to the other side. The ideal is to find ways for both sides to change what they do to mutually cut costs, time, errors, hassle and so on.

Now we’re getting to the nub of it. Convenience is a condescending term that obscures the real nature of consumer demand, which is for improved productivity: personal productivity. Like any business, individuals naturally want to improve their personal productivity and gravitate towards those that help them do so.

But in most areas of our lives, our productivity is appalling. Why? Because the business of making a modern life is extremely complex and time-consuming. It involves the management of at least a dozen major life “departments” – home, finances, health, communications, transport, social network, leisure and entertainment – and so on. And each such department requires the acquisition, coordination and integration of a series of disparate things: necessary tools and ingredients, knowledge and skill, information… plus the sheer hard work of putting them all together to reach a desired outcome. If we really wanted to optimise the management of all these life departments, we would have to spend all day, every day, doing it.

cut through the compromises

Instead, we compromise. And as we all know, busting compromises is the stuff of breakthrough innovation. How could providers help individuals say, improve the maintenance and management of their home or their finances while at the same time saving time and eliminating hassle? Offering such a service would necessitate working at a different level involving products (material artefacts), services (skilled work) and information/knowledge. But if somebody got it right, they could open up a completely new market.

The package holiday did exactly this decades ago. Back then, very few people took holidays abroad, partly because of the cost but also because they lacked knowledge of destinations and processes, were daunted by the hassle and complexity of coordinating flights, transfers and hotels – and because of all the risk and uncertainty generated along the way. By addressing these barriers, the package holiday revolutionised the leisure market.

Not all transformations have to be so dramatic, of course. The convenience foods bandwagon gained momentum steadily over decades by exploring the same core idea of time-saving and hassle-avoidance in countless new ways. Renegotiating divisions of labour between “producer” and “consumer” to save time or cut costs is now a major engine of innovation. The queue is just a tiny tip of a truly massive iceberg.v

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