Insights & Cases

Why we value digital products less, and how to increase our attachment to them

Digital products have a large number of advantages over their physical counterparts. They are typically more accessible (e.g., ownership of a game, movie, or song can often allow you to play the media on any compatible device). They are portable (e.g., an Amazon Kindle can store upwards of thousands of titles, and the same applies to digital music). There is also usually a decreased risk of losing or breaking your product, as you can simply retrieve a song or game from your account. Despite all these features, a variety of sources indicate that a large number of people still prefer physical copies of products, regardless of type. Even amongst 16-24 year-olds, who you might expect to be most receptive to non-material products, there are sizable portions who prefer physical copies (Bury, 2013). A survey revealed that this preference was highest for books (62%), but was considerably large for other product categories such as movies (48%), newspapers and magazines (47%), and even video games (31%). Why might people value physical objects more, even when digital variants offer such a range of advantages? In this article, I want to explore some of these reasons and review recent empirical work on the subject....

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Case: How we helped Belmio coffee position their premium capsules

The premium coffee brand Belmio faced a difficult challenge: marketing high-quality aluminum coffee capsules in a crowded market of lower-grade plastic alternatives. Should they wade into the retail fray, or shift to a direct selling model? How should they adjust their branding to differentiate themselves sufficiently from large international players? These types of questions required evidence-based answers. To achieve a greater strategic focus, Belmio enlisted the help of Needle. We began by adopting a customer-centered approach, diving into existing research for insights into why consumers choose coffee capsule machines. We also researched future trends and developments in coffee consumption on an international scale. Lastly, we complemented this data with an overview of the coffee market, focusing in particular upon Europe. This involved a detailed analysis and comparison of Belmio’s main competitors. Through this approach, we were able to identify promising branding and distribution opportunities. For example, one of our key findings was a growing consumer preference for gourmet and premium coffee. Repeatedly, surveys have revealed that taste is the primary determining factor when consumers choose coffee (trumping brand, price, and availability), and these tastes are now entering an era of connoisseurship. This trend was particularly relevant for Belmio to capitalize...

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eSports: a new type of spectator sport

In 2016, the eSports market was valued at approximately 493 million USD. By 2020, analysts expect the market to swell to 1.49 billion. Revenue streams are drawn from a variety of sources, including game publisher fees, media rights, advertising, sponsorships, and even merchandise and tickets10. As a result, eSports are increasingly receiving attention in the mainstream press. However, what are eSports exactly? Why would someone watch others play video games? The goal of this article is to delve into the world of eSports, from the definition, history, demographics, and motivations. What are eSports? eSports is a broad term that refers to competitive video gaming as a spectator sport. Although your mind may jump immediately to virtual variants of physical sports, this is not the case. eSports is home to a wide range of game genres. Possibly the most popular genre of eSports is multiplayer-online battle arenas (including the most played game worldwide, League of Legends2, or DotA 2). First-person-shooters such as Counter-Strike: Global Offensive or Overwatch are also incredibly popular. So too are real-time-strategy games such as Starcraft 2 and, until recently, Warcraft 3. There are also fighting games such as the Street Fighter series or Tekken. Other, less popular, genres...

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ECB has no institutional view on Bitcoins

Last month, the European Parliament Committee on Economic and Monetary Affairs received Mario Draghi, the president of the European Central Bank (ECB). Crypto currencies were a very hot topic, following China’s announcement that it would prohibit initial coin offerings and exchanges of Bitcoins. It caused stress on the international markets (1). At the same time, ECB Vice-President, Vítor Constâncio (2), has called crypto currencies an instrument of speculation and compared the sharp volatility in exchange rates to the Dutch tulip Mania (in 1637 prices of tulip reached extraordinarily high levels and then dramatically collapsed). In addition, Mexico is introducing legislation to regulate FinTech firms (including those operating with crypto currencies) and here are similar initiatives in many other countries (3). These recent developments were all highlighted and debated by MEPs. Draghi was invited to explain the ECB stance to mitigate the risk of crypto currencies. MEPs asked him if he was more on the Chinese side, in favor of prohibition, or on the Japanese side, in favour of regulation. Draghi said that he didn’t think that a regulatory framework for crypto currency was currently needed. Then, he added that the ECB has no authority to either to prohibit or regulate...

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Effective alternatives to brainstorming

Ideation is a critical phase in project development, yet all too often, it is reduced to a whiteboard, a set of post-its, and a scramble to emerge with a socially satisfactory conclusion. However, decades of research have uncovered a series of techniques that can help innovators get the most out of the ideation phase. The purpose of this article is to discuss why traditional brainstorming often fails, and techniques that can navigate these roadblocks. Standard brainstorming In a typical brainstorm session, a group attempts to generate ideas in a two-stage process (Diehl & Stroebe, 1987). The first stage involves an open environment where participants are encouraged to avoid evaluation, vocalize a large number of outlandish ideas, and build upon other participants’ contributions. In the second stage, people evaluate the ideas, often by means of coding, categorization, and discussion. Through this process, brainstorming aims to generate a wide assortment of ideas, and then narrow this selection through careful reasoning. Brainstorming is an incredibly popular technique for firms and groups to innovate, but as has been repeatedly noted by both academics (Mullen, Johnson, & Salas, 1991) and the mainstream press (Lehrer, 2012), brainstorming simply isn’t that productive. Although the general procedure described...

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Team diversity: The foundation for successful innovation

Where does successful innovation originate? A eureka moment in the shower? A whiteboard coated in post-its and sharpie scribbles? Inspiration and ideation are indeed critical steps for successful innovation, but there is one important factor that may precede them: team diversity. Diversity is often in the headlines for unfortunate reasons. Overall representation of women and ethnic minorities in the tech industry is abysmally low, and many companies are plagued by sexual harassment and discrimination scandals.  Although inclusiveness and diversity are moral obligations, they also make sense from a business perspective. As will be discussed in the following sections, a number of studies empirically link team diversity (i.e. gender, ethnicity, and education) to innovation performance. Gender balance and innovation In a study looking at the composition of 4277 Spanish tech firms, researchers sought to determine whether gender diversity (i.e. balance) predicted firm innovation (Díaz-García, González-Moreno, & Sáez-Martínez, 2013). This is especially relevant for Spain, where the authors note that the technology sector is particularly imbalanced (64.2% male). The dependent variable was whether the firm had produced a new product on the market in the past two years (i.e. radical innovation), based on data from the Eurostat’s ‘Community Innovation Survey’ (CIS). As predicted,...

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The Fintech Challenge – How PSD2 will kickstart banks in their Digital Transformation

The Fintech Challenge - How PSD2 will Kickstart Banks in their Digital Transformation

Fintechs are perceived as a threat to financial institutions. However, in reality they will be partners in the bank's journey on their digital roadmap. Via PSD2, banks and fintechs can strengthen their collaboration. The pressure to comply with PSD2 (the Second Directive on Payments Services) has placed huge demands on financial institutions. Banks across Europe need to provide open platforms and access to information to comply with the revised regulation. The revisions were introduced as a means to include fintechs within the regulatory space, while giving them access to the banks' customer data. No wonder bankers are having sleepless nights. The advent of fintechs must seem like a tsunami rolling in to many traditional institutions. These firms are often hamstrung by aging software that no-one understands anymore, because all the experts who were there when it was installed have retired, moved on, or even been retrenched. Most of the code that keeps banks running is written in Cobol, which no-self-respecting Java developer will maintain. What is more, most CIOs have to spend up to 80% of their budget on these Jurassic systems, which leaves no wiggle room for digital adoption. The situation is exacerbated by the massive infrastructure, staff complements...

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Our five key takeaways from Zest Malta

Zest Malta Picture

Our CEO, Geert Desager, recently addressed the tech startup community in the Mediterranean at the Zest event in Malta, held on the 19th and 20th of September (1). His presentation set out to debunk  seven commonly held beliefs about innovation and offered alternative lessons based on facts.  This event attracted over four hundred attendees from the tech startup community in the Mediterranean, including entrepreneurs, investors, accelerators, and corporations. The panelists kicked off the day with a vibrant discussion about disruption and how new technologies will transform businesses and society at large. Blockchain was at the heart of the debates (2). This technology allows the registration of anything of value such as money, stocks, healthcare records, or identities on a distributed ledger. It has the potential to disrupt nearly every industry, changing the way business transactions are performed. #1 Great ideas are never too small for Malta Hon. Silvio Schembri, Parliamentary Secretary for Financial Services, Digital Economy and Innovation, noted that Malta is well positioned to take advantage of the current disruptive environment driven by tech startups. Great ideas are never too small for Malta! The Government has worked tirelessly to kick-start a startup ecosystem. As a testament to this, it...

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How does customer feedback affect attitudes and behavior?

How many times per day are you asked to provide feedback on a product or service? Like this app? Rate it in the app store! How is our website? Please fill out this satisfaction measure. Thanks for your recent purchase. Do you have time to fill out a short survey based on your shopping experience? While this kind of data can be useful in service optimization and design, these methods can result in unexpected outcomes. More specifically, soliciting customer feedback can often result in the ‘measurement effect’. This is the finding that measuring attitudes can affect subsequent behavior (positively or negatively). Therefore, how you go about measuring attitudes is essential. In this article, I want to discuss some of the ways in which polling customers can affect their attitudes and behavior. Evaluation Expectations: We are more critical when we expect feedback solicitations In many of our consumption experiences, we can sense an upcoming evaluation. Amazon orders, hotel stays, even an Uber ride; we know that we will be asked to provide our satisfaction and feedback afterward. What effect does this have on our attitudes? Consumer research indicates that it probably awakens the critic within us, making us more negative about...

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Five Startups Who Put Behavior First

behavioral startups

Many companies seek to apply behavioral science to existing business models. Sometimes these are hasty ad-hoc executions, such as failed gamification systems. Other times, they may be more thoughtful and innovative, such as Merrill Edge's "Face Retirement" campaign.  However, such examples are still a matter of applying behavioral insights to a traditional model. What about companies that use behavioral insights right from inception? In this article, I want to list five excellent examples of startups building their core business model around behavior. 1. Moven: Motivating long-term savings What it is: A variety of fintech companies provide customers with savings/spending reminders and other tools to help consumers try to budget their money effectively. While Moven does also offer these types of features, it also goes one step further by offering a “Smart Savings Account”. This system allows customers to develop a personalized savings path, where personally relevant savings goals (i.e. a vacation, a new car) appear on a wish list timeline. Customers’ saving and spending behavior interact with this list, allowing them to visualize their progress towards specific goals. Why it works: Cognizant recently published a report that argued that digitization has disproportionately favored ‘fast money’. There are apps and technologies...

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