Retail – A Roller Coaster Ride To An Online World

Covid has affected most industries to some extent or another over the past 18 months. But, for the retail sector, it has been one hell of a roller coaster ride. 

Even before Covid struck a growing move to online shopping had seen many retail chains struggle to keep physical stores open.  Covid brought with it long periods of lockdown restrictions that forced people to turn to online shopping.  This has greatly accelerated long term trends and we have lost several well-known brand names from the high street. 

But now we are finally approaching an end to lockdown restrictions in the UK, it seems like an appropriate time to take stock of what has happened.  So, just how has Covid changed the retail world and how might we separate long-term shifts in consumer behaviour from the relatively short-term impacts of covid?

2020 saw a significant shift online

Trends in UK retails sales graph

Before 2020, average weekly retail sales had gradually risen year on year.  In recent pre-Covid times, modest, yet healthy, 3% or 4% annual increases were the norm.  But when Covid struck, spending slowed considerably and, in the final analysis, sales in 2020 were virtually flat compared to 2019.

But if overall growth stalled during Covid, growth in online sales witnessed a dramatic rise.  Even prior to Covid, online retail had been rising (10% growth in 2018/19) and was the main driver of overall sales growth.  However, 2020 saw online sales jump by 47% compared to 2019.  Despite this, overall retail sales growth was flat which, of course, means that high street sales have fallen.

Nearly one third of UK retail now happens online

Graph of long term trends in UK retail sales - % online

Whilst the change over the past 18 months has been dramatic, it is nevertheless a continuation of trends we have been experiencing for years now.

In 2011 only 8% of sales happened online.  This number has risen steadily every year since then, such that by 2019 it had reached 19%.  If Covid had not hit when it did, we might have expected to see online sales rise from 19% to perhaps around 20% or 21% during 2020 anyway.

However, Covid forced us online.  At times, many shops were forced to close and, even when they were able to open, shoppers often remained nervous about returning to the high street.  The net effect of this was a jump in online sales from 19% to 28%.

2021 has so far maintained this increase.  In the 12-month period leading up to the end of May 2021, 31% of retail sales were made online.

The question now is, how much of this business might return to the high street now that restrictions are lifting? 

Certainly, we might expect to see some pick up.  With so many people confined indoors for so long, there are many who are looking forward to getting out and about again.  But that may only lead to a short-term boost for the high street.  Longer term, a significant proportion of business may end up remaining online.

Lockdowns boost online sales

A more detailed look at the trends over past 18 months shows how lockdowns have continued to boost online retail.

Graph of trends in UK retail sales since January 2020 - % online

During periods of increased lockdown restrictions – the Spring of 2020, November 2020 and January/February 2021, online sales rose to around one-third or more of all retail sales.  In periods when restrictions relaxed this proportion fell back down to around 27%. 

27% is still higher than the figure of around 19% or 20% we were experiencing prior to Covid but lower than the lockdown peaks.

What this suggests is that, in the longer run, Covid has inspired a step change in our behaviour.  Rather than seeing online spend rise from 19% to around 21% (as we might have expected if Covid had not hit), we have seen it jump to a level of around 26% or 27% or more.  The lifting of restrictions will see some return to the high street in the second half of 2021 but not back to pre-Covid levels.

Overall, it looks like Covid has accelerated the process of migrating retail online by around three or four years.  So, when 2021 is done, we are likely to be looking at a year in which online retail has accounted for around 26% or 27% of all retail sales.  2022 will probably see this figure grow at a more sedate but steady pace to around 28% or 29%.

Non-food retail heads online

Nearly half of online sales are made by businesses with no stores (i.e. pure-play online retailers).  These businesses have benefited significantly from the pandemic and will, no doubt, continue to thrive in the post pandemic era.

But what about the more established retail businesses that possess high street stores.  Many of these now have online stores as well and several have been able to make up for at least some of the shortfall in high street sales with online orders. However, there has been a significant difference between the trends experienced by food retailers (such as supermarkets) and non-food retailers (such as clothes shops).

The effect on non-food retail

Graph of trends in UK retails sales since January 2020 - % online (food v non-food)

Covid has had an impact on all forms of retail but the effect on non-food retailing has been far more significant.

Of course, the non-food retail sector has been subject to enforced periods of closure at times when Covid cases have surged.  So, it is no surprise to see the proportion of online sales increase significantly at such times.

In the first wave lockdown, the proportion of online ordering reached a peak of 44% of all non-food retailer sales in April 2020.  It peaked again, partly boosted by Black Friday and partly by increased lockdown restrictions in November 2020, at 38%.  As December saw a slight easing in restrictions the proportion of online sales briefly dropped down again.  Online sales shot back up to 41% during the January lockdown, reducing again once restrictions eased.

However, although eased restrictions have boosted the proportion of high street sales, it seems that a proportion of business that went online after March 2020 has remained online.  Prior to the first lockdown, around 15-16% of non-food retail sales were made online.  Since Covid hit, it has never once fallen below 23% in ensuing months, even when lockdown restrictions have eased. 

Covid has prompted a lot of people to give online shopping a try and, having tried it, they have taken to it.  The net effect looks like a permanent shift in the market from around 15%-16% online sales to around 23%-25% in the medium to longer term (assuming no further lockdowns).

Trends in food retailing have been less volatile

Supermarkets and other food retailers have benefited from being able to remain open during lockdown.  This, coupled with the fact that everyone will always need their weekly groceries, has meant that a much larger proportion of sales has remained in store.

The first lockdown, in the spring of 2020, saw a shift to a higher level of online ordering; rising from 6% to around 10-11% in a single month. 

This probably reflects a combination of two things.  First, that a proportion of the public were very reluctant to venture out when the pandemic began (in some cases because they have or live with someone with a serious health condition).  Second, at various times people have been asked to self-isolate due to having a positive test or coming into contact with someone with Covid.  In these circumstances the only options are to get someone else to do your grocery shopping, or to order online.

However, following the initial increase in online ordering the proportion of food retailing occurring online has remained remarkably stable at around 11%, ever since April 2020.

Food retailing looks set to remain more high street bound for longer than other forms of retail.  Post Covid online ordering is likely to remain higher than before (at around 10%-11%).  The longer-term trend is likely to be one of a gradual annual rise in online shopping.

The long term picture

The migration to online retailing looks set to continue.  Covid has only really served to accelerate long term trends. 

Looking ahead to the coming year, even assuming no further lockdowns, we will be living in a world in which over one-quarter of UK retail sales will happen online.  Furthermore, over the next three or four years, this is likely to increase to over one-third.

Retailers will, in future, have to put as much thought and energy into the design of their digital stores as they have historically invested in their physical ones.

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future. 

You can read more about us on our website.  

If you wish to follow our weekly blog you can view all out past articles on our website here.

If you have any specific questions about our services, please contact us.

Source

Office of National Statistics

A green vision in a crystal ball

A Green Future?

As a society we have become more conscious of green issues and the dangers of global warming.  New technology such as solar and wind power and electric cars are becoming increasingly prevalent.

But to what extent do we associate ourselves with green causes and environmentalism these days?  And, if we do, is that really making any significant difference to our behaviour?  Or is there a lot of ‘green’ window dressing involved here?

How green are we?

Market research from Synchronix shows that, in 2021, 8% of UK adults (aged 16-64) list ‘environmentalism’ as one of their key interests. 

To put that in context this is more than the proportion who see ‘religion’ as a key interest (5%).  And this is on a par with the 8% who say ‘motorsports, cars and bikes’ are a key interest.

That does not mean to say that ONLY 8% of us care about the environment.  Take religion as an example.  Only 5% of us would identify religion as one of our main interests.  However, far more than 5% of us would identify/associate ourselves with a particular religion (as opposed to having no religion at all). 

It’s much the same with people who express an interest in environmentalism.  It may be that only 8% of us would strongly associate ourselves with the green cause but, no doubt, a great many more people beyond this number would nevertheless care about the environment, albeit to a lesser degree. 

This 8% would therefore represent those of us who are most strongly committed to a greener future.

But does it make a difference?

Saying you are a keen supporter of environmentalism and actually doing something tangible about it are two different things.  Do such sentiments translate into action?

There is evidence in our survey to suggest that it does. 

18% of people who express their support for environmentalism live in households that either own an electric or hybrid car and/or have solar panels on the roof.  This compares to 10% of those who don’t see environmentalism as one of their key interests.  So, an interest in environmentalism can translate into tangible action.

Who are the ‘greens’?

Those with a keen interest in environmentalism are as likely to be male as female and come from a mix of ages.  Perhaps environmentalism is a little more popular amongst younger adults, but not significantly more so (10% for the under 35s vs 7% for the over 55s is hardly an earth-shattering generational divide).  The same is true when looking at differences by household income – 9% for those earning above £25k a year as against 7% for lower income households reflects an extremely limited real difference. 

It seems clear that interest in the environment really does come from a broad mix of people from different backgrounds.

However, keen environmentalists are more likely than the rest of us to also be religious (17% claiming a strong interest in religion is significantly higher than the figure of 5% for everyone else).  It would seem that religious belief, for some people at least, encourages them to care more about the environment.

Green activism

Enthusiastic supporters of the green agenda are also more likely to see themselves as being involved with social activism (19% vs 5% for the rest of the population).  However, this does mean that most green enthusiasts do not actually see themselves as a social activist.

Perhaps unsurprisingly keen environmentalists also show a stronger interest in nature and the outdoors more generally.  Our survey shows that they are, for example, more likely to express a strong interest in wildlife (49% vs 14%); more likely to enjoy walking/hiking (63% vs 33%); and more likely to enjoy gardening (50% vs 24%).

In this sense a passion for environmentalism can be seen to be interwoven with a person’s wider lifestyle.  Whether their passion for the outdoors makes them more environmentally conscious or whether they are more environmentally conscious because of their higher engagement with the natural world is debatable.  However, it is probably more likely that environmentalism and a passion for the outdoors and the natural world are inter-related aspects of the same lifestyle (rather than one serving to promote the other).

Has COVID made us think differently about our environment?

COVID has brought big changes to our lives over the past year and a half.  Lockdowns have limited our ability to socialise and curtailed a lot of indoor social activities that we took for granted before.

Getting out and about in the open air, at times, has been the only alternative to being cooped up at home on our own.  Perhaps some of us have become more aware of the value of our natural world as a result and hence more concerned for the environment.

Many of us will also be aware that one of the side effects of lockdown has been the reduction in pollution.  Fewer cars and planes travelling from A to B means fewer emissions.  More limited economic activity has meant less pollution.

Even if only temporary, COVID has led to the biggest reduction in CO2 emissions ever measured globally – fully 17% in early April 2020.  In some cities the difference in air quality this has created has been very noticeable.

One cannot help but wonder, in the longer term, whether COVID will have a lasting impact in terms of causing many of us to re-assess our priorities with regards to the environment.

Future Generations

Interest in environmentalism is a little higher amongst parents with children under the age of 12 (10% vs 7% for non-parents).  This is only a small difference, but it does suggest that parents of younger children have been prompted to think more deeply about these issues and the kind of world they want their children to grow up in.  And, if so, it is likely they will pass on these concerns and values on to the next generation.

It would be a great exaggeration to claim that the UK is a ‘green’ nation today.  After all, 8% is very much a minority.  However, 8% of UK adults equates to nearly 4 million people who now see environmentalism and green issues as representing key concerns for the future.

Sources:

Synchronix Research:  Survey of 1007 UK adults aged 16-64 conducted online in May/June 2021.

AAAS

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future. 

You can read more about us on our website.  

If you wish to follow our weekly blog, you can view all our past articles on our website here.

If you have any specific questions about our services, please contact us.

Covid germ

COVID: Light at the end of the tunnel?

Over 80% of UK adults have now received their first vaccination, and over 60% are fully protected, so is there finally some light at the end of the COVID tunnel?

With the Indian variant now driving up the number of infections and the final phase of lockdown easing still to come, there is still some uncertainty. So, if we look at the numbers, what are they telling us?

Cases are starting to rise again

The easing of lockdown in the spring, coupled with the appearance of the Indian variant in the UK have combined to start pushing case numbers up again.  Yet this has thankfully not translated into substantial increases in numbers of hospitalisations or deaths.  So, what do we see if we take a closer look at the numbers?

The trends

Perhaps if we start by plotting the history of COVID infections in the UK over the past year we might be able to see some trends. 

You are probably familiar with government graphs showing trends in cases or trends in deaths etc.  They have appeared on the news often enough over the past year after all.  But often we don’t see all the information plotted together on the same chart and that can make it tricky to see how, for example, cases are translating into hospital admissions.

However, if we chart new cases, hospital admissions and deaths together on the same graph we get the following:

UK Covid Trends: June 2020 - June 2021

The variant effect

Well, we can clearly see the trends in case numbers; these are by far and away the biggest numbers on the chart after all.  We can also mark some key dates on the chart for context – like when the Kent variant was first identified, when vaccine roll out began and when we first spotted the Indian variant in the UK. 

This chart clearly shows us how cases rose in the UK after the Kent variant popped up in the Autumn of 2020.  We can also see just how bad things got in December/January, with the big spike in new cases really standing out.  And since late January we can clearly see how new case numbers tailed away to a low level during the spring.  Unfortunately, we can also see how new case numbers have started rising again in June.

But what about hospitalisations and deaths?  These numbers are also plotted on the chart.  But, oh dear!  It’s very hard to see the trend in either because the numbers are so small relative to new case numbers.  We can just about make out that the numbers for hospitalisations and deaths experienced an uptick in December/January but otherwise the trend line looks flat.

This is the main reason why we rarely see all three of these things plotted together – doing so makes it hard to see what is happening in terms of hospital admissions or deaths.

So how can we visualise the COVID trends in a more accessible way?

The raw data does not lend itself to easily comparing all three measures together in a single visual.  The case numbers dwarf the rest of the information to such a degree that it mostly obscures our ability to see any trends at all in the other measures.

One way to get around this problem is to create an Index. 

If we create an Index for each of our three key measures (cases, hospital admissions and deaths) then this makes a direct comparison much easier to represent visually.  As with any Index we need to set a base score of 100 for each measure.  In this case, let’s take 100 as equal to the average number recorded for each measure over the past year. 

The average number of cases over the past year turns out to be around 12,000 per day.  So, if we set that as equal to 100, we can create an index for cases based around it.  The same approach sets the Index for hospital admissions at 100 being equal to the average number for the period (c.950) and in the case of deaths, the average is c.240. 

Now if we use this to re-plot our graph using these Indexes, it is much easier to see how trends in these three measures might relate to one another.

UK Covid Trends INDEX: June 2020 - June 2021

Cases led to deaths last winter

Now it is much clearer to see just how the trends in hospital admissions and deaths mirror / follow the trends in reported cases.  We can also see the slight time lag involved.

In the winter spike, it is now apparent that the peak in case numbers very quickly translated to peaks in hospital admissions and deaths.

So, what can we tell about where we are today based on past trends?

Well, if we look at the recent data, from April onwards, we can see cases rising again in May/June but, currently this has not translated into any notable rise in hospitalisations or deaths.  The vaccination program is having the desired effect in terms of depressing the numbers of the most serious cases, even if it has not prevented a rise in cases overall.

But now things are different

We can learn more if we compare what happened during the last significant wave (Autumn of 2020) with what is happening now. 

Back in September/October 2020 we had some similar conditions here in the UK – lockdown had been eased after cases had fallen to a low level over the summer for one thing.  However, as restrictions eased, so we began to see an increase in cases.  We also experienced the introduction of a new, more infectious, strain of COVID in the form of the Kent variant.

It would seem that the UK is now facing a similar set of circumstances: we have eased restrictions after having brought down the case numbers to a low level but we are also having to live with emergence of a new and more infectious variant (Indian rather than Kentish this time).

So, what do we see if we directly compare what happened in the Autumn of 2020 with what’s happening now using our Indexed visualisation?

UK Covid Trends INDEX: Summer/Autumn 2020 v Spring/Summer 2021

This makes it is even easier to compare the two periods directly.  And the more focused comparison makes it possible for us to mark a few other key dates on these graphs for context – specifically, dates when lockdowns were eased.

The Autumn data shows that, as September progressed, we saw a rapid rise in all three measures: cases, hospitalisations and deaths. 

The recent data shows a less rapid but nevertheless significant rise in cases, even though the Indian variant is more infectious than the Kent variant.  On the negative side, it looks like this rise is set to continue.

The vaccination effect

On the positive side we can see that hospitalisations and deaths are not rising at anywhere near the alarming rate that we saw last Autumn.  We have seen no more than a slight increase so far. In this respect it looks like the vaccines are indeed having the desired effect.

Much of the rise in cases reflects infections amongst younger people who are least likely to be protected by vaccination at this time.  These infections are not translating into more serious cases because younger adults are less likely to become seriously ill with COVID.  Also, people who have received a vaccine who get infected are much less likely to get seriously ill.

There is cause for some caution here, however.  Rising numbers of infections increases the probability of new strains emerging; something scientists are keen to avoid. 

But, as vaccination continues to roll out over the summer, we should see an even more significant depressive effect on infection rates as well as on the numbers experiencing serious illness and death.

Whilst we may not be there yet, but the figures clearly show that there is indeed some light at the end of the tunnel!

Source:  UK Government Coronavirus data

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future. 

In this particular blog piece we’ve aimed to show what the numbers are telling us about current COVID trends in the UK.  However, we also hope we’ve been able to show why and how using an Index can help us visualise trends in a manner that is more accessible and meaningful that simply using raw data alone.

You can read more about us on our website.  

If you wish to follow our weekly blog you can view all out past articles on our website here.

If you have any specific questions about our services, please contact us.

Airline seats

Can we ever really have truly ‘green’ aviation?

Can we even have ‘green’ aviation?  Today’s aircraft burn large quantities of fossil fuels after all – that’s not especially green, let’s face it.

The aviation industry has long had a reputation as a significant contributor to global warming.  Prior to COVID, the amount of air traffic globally had been rising steadily for the past couple of decades.  And, with more traffic, comes more emissions.   

In the future, with many Asian economies continuing to develop apace, we may well see the level of aviation traffic increase even further.  That could well lead to the industry contributing even further to future global warming.

But could it be that new technology can help to deliver a much greener future for this industry? 

The growth of air travel

Before COVID, aviation had witnessed a steady rise in global traffic over the past decade.  Between 2010 and 2019, there has been a 2.7 fold increase in domestic and international passenger flights globally.  This increase was particularly notable in developing economies in Asia.  The trend was clear – as emerging economies become more developed, so the level of air traffic will increase.

COVID, of course, brought this inexorable rise to a sudden halt.  The trend was put into a sudden reverse almost overnight; so much so that global air traffic in 2020 was 34% down on 2019.

But now, as vaccination programmes roll out, we are likely to see air travel recover.  If the longer-term trends are re-established, the next decade is likely to see an ongoing rise in air travel.

So, how much of a problem is it?

In 2019 aviation accounted for an estimated 2.8% of global CO2 emissions.  This may be less than many people might have thought, but it’s significant nonetheless.

Improvements in the efficiency of fuel consumption have minimised the impact of rising aviation traffic to an extent.  Since 2000, despite the overall rise in air traffic, thanks to technology, the level of CO2 emissions has risen by just 50%.  However, these efficiency savings have tapered off in recent years and, without a significant technology breakthrough, further emission increases will inevitably follow any increase in air traffic.

In fact, the level of impact on global warming is potentially more significant than the 2.8% contribution to CO2 emissions.  This is because of what is known as the ‘aviation multiplier’.  Put simply, this reflects the fact that aircraft produce emissions other than CO2 that also contribute to global warming.  The impact of these emissions is less well understood but the discharge of nitrous oxide, water vapour and soot also contribute to global warming.  Thus, the overall contribution to global warming for the aviation industry is likely to be higher than 2.8%.  Estimates vary but it could be as high as 5%-6%.

In a developed economy like the US or the UK, where air travel is more frequent, the true contribution aviation makes to global warming could be a lot higher.  Some have estimated, for example, that in the UK, 13%-15% of the UK’s contribution to global warming comes from air travel.  The same is likely to be true for many developed economies.

At present, the most developed economies account for 62% of aviation CO2 emissions but represent only 16% of the world’s population.

Is there an alternative future?

No doubt aviation engineering will continue to develop more fuel-efficient aircraft.  However, further fuel efficiencies can only go so far, and it is unlikely to be enough to prevent emissions from rising overall.  Some sources estimate that if we continue as we have been, then even with more fuel-efficient technologies, we could see aviation emissions double by 2050.

COVID has temporarily limited the amount of passenger air traffic and forced many would-be business travellers to rely more on remote video meetings by Zoom or Teams.  Perhaps this will mean that many businesspeople will be encouraged to travel less in future.  This might serve to slow the increase in aviation traffic, but it would seem very unlikely that we would see any significant long-term reduction in demand.

If we are to reduce aviation emissions in future, the only realistic answer is likely to come from the development of new, greener, technology.

Electric Planes

We already have electric cars – so why not electric planes?

Actually, we do already have electric planes.

In 2010, Airbus developed the world’s first all-electric, four-engine aerobatic aircraft, CriCri.  Since then, it has developed a couple more, small, electric powered planes that feature vertical take-off capabilities.  The Vahana is a small, single seat, aircraft that has made over 100 test flights.  The CityBus is another small aircraft (capable of seating four) that made its first flight in 2019.

Both these aircraft are small and have a limited range (50 km in the case of the Vahana).  They are a first step but a long way from offering the capability to transport large numbers over long distances.

Airbus have also experimented with hybrid aircraft – combining traditional fuels with electric power in the form of the E-Fan X (based on a 100-seater Bae 146 short-haul airliner).  This was tested between 2017 and 2020 and features a single electric engine used in combination with three conventional ones. 

Whilst a lot was learnt from the E-Fan X project, it is just a first step in the journey to developing a viable hybrid electric aircraft.  The E-Fan X itself is not yet a viable commercial proposition.

Boeing and NASA are also experimenting with hybrids.  The SUGAR Volt initiative represents an ongoing attempt to develop a hybrid plane.  As with the Airbus projects, it is currently at an early stage of experimentation.  One related project is the STARC-ABL (single-aisle turbo-electric aircraft with an aft boundary layer propulsor).  This concept aircraft will have two conventional engines mounted on the wings and an electric engine in the tail. It will be capable of carrying 150 passengers.

The eCaravan

However, if you want to look at a pure electric plane that is capable of flying today, then we need to look at something like the eCaravan.

At the end of May 2021, a modified Cessna, capable of carrying nine passengers took off near Moses Lake in Washington State.  It completed a 28-minute flight, reached a speed of 100 mph and achieved an altitude of 2500 feet.   The plane was the eCaravan.  It was powered entirely by lithium-ion batteries.

At the time of writing the eCaravan is the largest purely electric powered plane ever to fly.

The current limitation (the catch as it were) is, of course, the range.  With the existing configuration it would be possible for four or five passengers to complete a journey of no more than 100 miles.  That is enough for a short hop but clearly not viable for most commercial domestic flights, let alone international travel.

The challenge, at present, lies mainly in the limitations of battery technology.

The Battery Challenge

The challenge we now face is that lithium-ion battery technology is reaching its upper limits.  This has proven enough to enable electric cars to achieve significant performance improvements, but it is unlikely to be sufficient to do the same for aviation.

New, experimental, forms of battery technology may eventually provide the answer. 

The current front runners are likely to come from either silicon anode technology or lithium-metal.  A number of people are looking into developing these but the ones to watch would include Dr Richard Wang of Cuberg and, perhaps inevitably, Elon Musk. 

Musk recently tweeted that he thought he was not far away from having something viable for aviation appliations – “probably 3 to 4 years”.  Cuberg also anticipates making some significant advances over a similar time period.

Perhaps, then, the technology might be there to allow commercially viable electric powered planes to be developed during the late 2020s.  Only time will tell.

Hydrogen Fuels

However, electricity is not the only game in town.

Greener aviation might also be achieved through the development of hydrogen fuelled planes.  This is a technology that Airbus now appears to be focusing a lot of energy on.

In September 2020, Airbus unveiled three new concept planes that would use hydrogen fuel technology: all under the ZEROe brand.  This includes a turbofan design, carrying 120-200 passengers with a 2000-mile range. There is also a turboprop design that can carry 100 passengers with a 1000-mile range and a blended-wing body design that will carry 200 passengers, with a range of 2000 miles.  Airbus believes these concepts can be brought to market at scale by the mid-2030s.

Of course, hydrogen also currently has its issues as an alternative fuel source.  The main barrier is the cost of the fuel – currently high compared to conventional alternatives.  This is likely to change as more industries look to utilise this fuel as a greener alternative.  The other challenge would be to develop the infrastructure needed to produce, transport and store hydrogen fuel at airports.

Looking to the Future

We still have a long way to go before aviation technology has progressed to the stage where greener commercial aircraft with either no or ultra-low emissions are a reality.

However, the technology is now being developed that will eventually deliver that vision.  The question is one of when rather than if.

It is quite possible that within the next 10 to 15 years we will see either electric and/or hydrogen powered aircraft become a commercial reality; enabling us to finally achieve the kind of dramatic reduction in the environmental impact of air travel that we so badly need.

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future. 

Helping our clients understand the impacts of new innovations, science and technology markets is a key specialism for us.  You can read more about us on our website.  

If you wish to follow our weekly blog you can view all out past articles on our website here.

Sources

Aerotime

Airbus

Aviation Today

Boeing

Guardian

ICAO

IEA

NBC

Scientific American

Two gamers playing on a phone

The Casual Gaming Boom

Casual gaming has been around in one form or another for years.  You might even argue that some of the earliest games like Pac Man could be classed as casual games.  However, the genre has really taken off over the past decade.  The increased use of social media and the ubiquity of Smartphones has created the perfect environment in which casual gaming has been able to flourish.

App Annie predicts that mobile gaming spending in 2021 is on track to surpass $120 billion.  As a substantial chunk of that spend will be on casual and hyper casual games; the enormous size of the opportunities are self-evident. 

So, are we experiencing a casual gaming boom?

Who is the ‘casual’ gamer?

A decade or so ago, if you asked people to describe a gamer, the image of a teenage boy playing Call of Duty late at night on his games console would likely have sprung to mind.  Or, perhaps, they might be playing World of Warcraft on a desktop PC instead. But things have moved on a lot since then.

People who play casual and hyper casual games now include a great many gamers who never play either on a console or a PC.  A significant number of these gamers have come to gaming more recently and, indeed, might only ever experience gaming on a Smartphone or, perhaps, a tablet. 

This, then, represents a different audience of gamers from the traditional gaming market.  It is a much more female focused audience and has many different likes and dislikes, hobbies and consumer preferences that would distinguish the casual gamer from someone who might prefer to play CoD on an Xbox or Cyberpunk 2077 on a PC.

The gaming market is no longer a single homogenous audience, but rather a collection of different (if sometimes overlapping) audiences.  That means different channels, different media and very different commercial opportunities. Different audiences also provide very different opportunities in terms of the future potential for advertising and sponsorship deals.

But casual gaming is also a market that is still growing.  So, the composition of this audience is changing and evolving each year.

The audience is not only different in terms of its composition. It is also clearly different in terms of what people are looking for from gaming.

The Casual Gaming Experience

Games like Assassin’s Creed and Cyberpunk 2077 are enthralling role-playing experiences.  Many people play these games precisely because they like to get into the characters and absorb themselves in a fantasy world.

It is easy to sit down in front of PC or a console and lose yourself for hours in a highly engrossing escapist experience.  In addition, it’s an experience that can be very intense, requiring sometimes lengthy periods of quite focused concentration.  This can be quite a mentally challenging experience.  It may also be quite difficult to dip in and out of – you often feel obliged to hang on just to get to that next cut-scene or to find a good place to save.

But casual and hyper casual games are far less demanding in terms of concentrated time.  You can potentially play a game in 15 or 20 minutes.  This makes it easy to fit your gaming in around other things.  Play a quick game in your lunch hour, or a quick couple of games on the train on your commute to and from work.  As one casual gamer put it on an online forum:

I play half an hour to an hour on my phone everyday. I don’t really have much to do while I’m on the bus or at lunch, so I’d just use to time to play video games on my phone.

Relax with a casual game

It’s because these game can be less mentally demanding that people are more likely to see them as relaxing.  They deliver a means to wind down after a hard day’s work.  As another gamer put it:

What I loved so much about Animal Crossing was how I could wind down and relax.

As such, these games lend themselves more to humour, light-hearted entertainment, and cartoon characters.

fun and utterly hilarious.

But, whilst it is possible to quickly fit in a game in your coffee break, it is still also possible for gamers to spend hours playing such casual games.  Indeed, gamers can and do become every bit as a engrossed with games like Clash of Clans on their mobile phones as a console gamer might with Red Dead Redemption.

In a way gaming is becoming not that much different from television.  TV producers have, for many years, understood that working within different genres means appealing to different audiences.  The audience you might attract for an enthralling thriller is not the same as you’d get for a light entertainment programme. 

So, as the variety of different gaming genres evolves, so too will the variety of audiences.  And so too will the need to understand them independently from each other.

A Blank Canvas

Many of the new generation of casual gamers have come to gaming via the Smartphone and via casual games specifically.  There are many amongst them who have never played a console game or even a PC game.  Perhaps, they have only started playing games within the past few years.  All this means that they are not constrained by any of the pre-conceptions that PC and console gaming fans might have.  That means they represent much more of a ‘greenfield’ opportunity for the future.

This relative lack of ‘expectations’ is likely to mean these gamers are more open to experimenting with new things.  Perhaps they are more open to in-game advertising, perhaps they offer the best opportunities for cloud.  Indeed, any genuinely new innovation in gaming might find a more fertile ground for uptake amongst these gamers than elsewhere.

On the downside, it should be remembered that many of these newer gamers may well not be so familiar with concepts that gaming publishers and developers might ‘assume’ gamers know about.  That means gaming companies need to be careful in using gaming jargon – these guys just might not understand it (or worse, misunderstand it). 

Assume nothing.

Cloud?

Mobile gaming may well prove to be an area to watch in terms of cloud streaming services such as Google Stadia, Microsoft’s Ultimate Game Pass and Amazon Luna. 

The mobile casual gaming audience includes many gamers who are not wedded to traditional console and PC gaming.  They will also include many people who are comfortable with streaming film or music to their mobiles already, so cloud gaming won’t be an alien concept to them.  But here, the cloud services need to get their content right.  Content, after all, is king – demand will entirely depend on a wide enough choice of content.

However here again, gaming companies need to be careful.  These people are not the enthusiastic, technically literate, hardcore of the gaming world.  They may not even have heard of cloud gaming or even understand what makes it any different from other forms of gaming.  They probably haven’t read any of the articles on the subject that appear in the gaming press.  So, this raises the question – how best to market such services to such people? 

Monetisation

Gaming has historically been financed by gamers paying for their games (either outright or perhaps by subscription).  However, recent years have seen a growing proportion of revenues generated by microtransactions where gamers seek to buy in-game content such as upgrades to the game, additional equipment (some functional, some purely aesthetic) and so on.

There are many games available where you can play a basic version of the game for free and any revenues come purely from upgrades to a more complete version of the game and/or from microtransactions.

The free-to-play model has proven a successful option and in future I can see this approach extended to deliver an even higher proportion of content for free.  Monetisation here will therefore be increasingly driven by the microtransaction approach and even by advertising and sponsorship deals.

TV is significantly financed by private advertising and sponsorship and this is now an increasingly important revenue stream for esports – it is surely only a matter of time before we start to see this proliferate across the gaming industry.  The obvious route in will be through the Smartphone based games – and that means casual gaming is likely to be at the forefront.

However, to capitalise on these opportunities gaming companies will increasingly need to learn from the playbook of other entertainment industries (like TV) who have been playing the advertising and sponsorship game far longer.  That means understanding audiences and knowing what advertisers and/or sponsors would offer a great fit for any given audience.  It also means finding the best way to accommodate this without disrupting game play or without it becoming overly intrusive.

Channels

One potentially dark cloud on the casual gaming horizon relates to channels.  At the end of the day casual gaming on Smartphones depends very heavily on two key channels – App Store and Google Play.  This grants Apple and Google incredible market power.

The current legal dispute between Epic and Apple has highlighted the potential problem here – are these channels becoming so dominant that they can effectively squeeze the margins of gaming companies down to near minimal levels?  This very fear has led Epic to invest heavily in its own store front.  At the time of writing, it is yet to be seen as to whether Epic’s legal action with Apple will change anything.

Nevertheless, Epic’s move to develop its own store may yet prove to be a shrewd one for the longer term.  You only need to look at food retailing in the UK to see that a relatively small number of dominant retail chains can seriously squeeze the margins of the food producers. 

The Future

There is little doubt that we will continue to see continued growth and diversity emerge in the casual gaming market over the next couple of years.  New audiences will continue to emerge and evolve as a result.

The challenge for the gaming companies will be to find ways to best capitalise on these audiences – and that will require a detailed understanding of them, plus, of course, how they continue to evolve.

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future.  That means understanding change – whether that be changes in technology, culture, attitudes or behaviour. 

We have considerable experience in the design and execution of market research surveys in the gaming, leisure and consumer tech sector.  We can offer a range of services to help you identify new market opportunities and to understand the current and potential audience for any given game. 

You can find out more about us on our website.  

If you wish to follow our weekly blog you can view all our past articles on our website here.

If you have any specific questions about our services, please contact us.

Sources

ANIMAL CROSSING COMMUNITY

APPANNIE

BBC

COMMONSENSEMEDIA

GAMESKINNY

MARKET WATCH

QUORA

SEATTLE TIMES

Robot image

I Robot

“In the twenty first century, the robot will take the place which slave labour occupied in ancient civilisations.”

Nicola Tesla

The Robots are coming

The past few decades have seen many significant advances in robotics.  As a result, we now live in a world in which an increasing variety of tasks utilise robots.  Oxford Economics estimated that robots could displace about 20 million manufacturing jobs by 2030 (that’s 8.5% of the current global workforce).

Indeed, the number of robots in the world has doubled over the past decade.  And, whilst they are not expected to revolt against the humans any time soon, they are nevertheless changing the world in which we live.

But what are Robots?

What counts as a robot?  Before we get carried away talking about machine uprisings, let’s start by considering what a robot actually is.

As it turns out, it can be quite difficult to come up with a definition that everyone agrees on.  Most people would agree that a robot is a machine.  But a robot must be more than just a machine to make it a robot. Kate Darling, a roboticist at the MIT Media Lab, defines a robot as:

a physical machine that’s usually programmable by a computer that can execute tasks autonomously or automatically by itself’

On this definition a radio-controlled drone is not a robot.  This is because it can only act based on instructions it receives from its controller.  However, it can become a robot if it becomes capable of performing actions independently of its human controller based on some pre-programmed automated logic.  For instance, if it is programmed to detect and avoid obstacles during flight without needing to be instructed to do so.

This fine dividing line between machines that are remotely controlled and machines that have the capability for autonomous action can make it difficult to spot robots.  Just how autonomous does a machine’s actions need to be to count as a robot? 

Simple machines that are not robots can perform tasks such as switching on and off, without human input, but we don’t necessary consider these to be robots.  It needs to be automated; it needs to respond to input from its environment and it needs to act independently of direct human control.  However, it also needs to be reasonably sophisticated in its ability to respond – otherwise a thermostatically controlled switch might potentially be called a robot!

How many Robots are there today?

Most robots are, at present, used in manufacturing and, in particular, for automated assembly processes.  The (International Federation of Robotics) IFR estimated that there were around 2.7 million industrial robots in use around the world in 2019. 

Robots are big business.  2019 saw 373,000 new industrial robots installed at a cost of US$13.8b.  

However, 73% of these robots exist in just five countries – the USA, Japan, Germany, China and South Korea. 

So what are Robots being used for?

Most robots are used in manufacturing and logistics operations.  Typically, that would be for assembly operations or for moving goods/parts around the factory floor or in a warehouse.

28% of all the robots installed in 2019 were in an automotive business.  The image many of us have of robots assembling cars is still a fair representation of the reality of robotics in the workplace today.  And a further 24% are in use in the electrical/electronic manufacturing industries.  That’s just these two industry sectors purchasing over half of the world’s robots.

However, robots are now also being used in a wider variety of other manufacturing sectors such as metal machinery, plastics and food. We can expect to see them used more extensively across manufacturing over the coming decade as technology develops viable applications outside of the automotive space.

Also, whilst most robots are still being installed in factories, we are now starting to see new types of robots emerging in other industry sectors as well.

When drones become Robots

Most drones are not robots.  That is because their radio operators directly control them. And in that respect, they are no different from radio controlled model aircraft.

However, some of the more advanced drones incorporate a degree of AI in the form of Computer Vision which enables them to detect and respond to obstacles whilst flying without the need for operator intervention.  This kind of technology also allows them to record observations about their environment in a more automated way.

The more autonomous a drone becomes, the more robot-like it becomes.  In future robot drones will become a reality.

Robots in logistics

Robotic (driverless) forklift trucks have been around for a while but up until now not in huge numbers.  In 2019, firms bought around 5,000 of these robot trucks – that sounds a lot but it’s still only 0.3% of the global forklift truck market and only about 1% of the size of the global market for industrial robots.

Nevertheless, logistics is becoming more automated, and the competitive demands generated by businesses like Amazon will no doubt act as an accelerator of change.

How fast robots will catch on in logistics remains an open question, but many industry commentators expect to see significant growth in their use over the coming decade.

Robots in healthcare

Robots are now also starting to make an appearance in our hospitals and health clinics.

Here, there are number of different applications.  Covid has seen a particular growth in interest in UV disinfection robots.  These may have had most prominence in the news over the past year, but they are by no means the only application.

Toyota have developed a robot (WelWalk WW-200) to help with the rehabilitation of patients suffering from lower limb paralysis.  And some companies have even developed robot surgeons to assist in simpler or more routine surgical procedures.

It is clearly very early days with a lot of this technology, but many people feel healthcare robotics is an area to watch for some potentially significant growth opportunities in the future.

Driverless vehicles

Driverless vehicles are, of course, a form of robot.  Trials are currently underway with driverless cars and we could well see these vehicles start to make an appearance on our roads before 2021 is out.

These robot drivers can negotiate their way from A to B – responding to traffic conditions and making autonomous decisions about when to speed up and slow down, when to avoid obstacles, and when to stop for traffic lights etc.

Just about any form of vehicle could be driverless.  Indeed, we may even see the day where passenger aircraft essentially become robot-controlled drones.

Robots in agriculture

One sector that is likely to see an increased use of robots is agriculture.  Here we are likely to see more driverless tractors and combines in use in the future. 

There are also robots today that can pick fruit, capable of gauging the ripeness of fruit and deciding for themselves which fruit to pick and which not.

Robot house servants

Simple robots are in use today for such basic tasks as vacuuming and CES 2021 showcased several concept domestic robots designed to help with a variety of common household tasks such as washing the dishes and tidying up.

The day when we are all served by Robot Jeeves is still a long way away, however, although the next decade is likely to see some increasingly sophisticated automation technology move us a lot closer to it.

I Robot

To get to a stage where we come face to face with a fully functioning, intelligent, humanoid, robot is (let’s face it) a long way off.

The key developments that are yet to come, which would make that possible, relate more to AI than to creating an electro-mechanical machine capable of replicating human motion.

How close are we to creating such an robot?

Various experts have different views on this.  Some have suggested some time between 2030 and 2060 is theoretically realistic – so potentially within our lifetimes!

That said, we have an issue in creating that kind of AI.  And that is the age-old AI problem – to design Artificial Intelligence, you really need to be able to define what “human intelligence” actually is.  Philosophers have debated this question for centuries without really arriving at a clear answer!

One thing is for sure though, robotic technology is going to offer some significant growth opportunities across a range of different sectors and applications over the coming decade.  It is just a question of identifying and exploiting the new opportunities that this technology will bring.

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future.  That means understanding change – whether that be changes in technology, culture, attitudes or behaviour. 

We have considerable experience in the design and execution of market research surveys in the field of both b2c and b2b science, engineering and tech markets.  We can offer a range of services to help you identify new market opportunities and to understand the position and strength of your brand in the market.  You can read more about this on our website.  

If you wish to follow our weekly blog you can view all out past articles on our website here.

Sources

ARIC Journal

BBC

Builtin

CNET

Heartbeat

IFR

Interesting Engineering

Intuitive

Investopedia

John Deere

MMH

Ohio University

Oxford Economics

Toyota

Wired

Flying Drone

The Drone Revolution

Since 2010, the growth in the use of drone technology has been gathering pace at an incredible rate.  When first developed in the mid-1930s drones were highly experimental and expensive.  Today, they are not only used for a wide variety of commercial applications, but have also become a popular and affordable piece of consumer tech. 

So, are we on the verge of a Drone Revolution?

How many people are using Drones?

In the UK, in May 2021, there were nearly 4,500 certified commercial drone operators of small drones and 1,751 operators of larger drones.   These are businesses using drones for serious commercial applications – applications deemed to present an equivalent safety risk to that of manned aviation.

However, these are now dwarfed by the number of hobbyists.  The CAA estimated there were over 130,000 UK drone users at the end of 2019 – the vast majority of which were hobbyists rather than commercial users.

In a larger market like the USA, the numbers are even higher.  The FAA figures show that there were nearly 875,000 registered US drone users in May 2021.

The Hobbyist

Drones are now very affordable, and a hobbyist can buy a decent drone to easily get up and flying for under £1,000 these days.  

Research by Drones Direct shows that hobbyists are mainly using their drones for filming video (77%) or taking photographs (75%).  The typical profile of these people is mostly male (96%) and middle aged (52% are aged over 45).  It is also clear that these are hobbyists using their drones quite frequently (58% fly at least once a week). 

There would appear to be a strong link between drone use and photography, with two thirds of drone users are also keen on photography.  Around one fifth of the adult population list photography as a hobby (that’s potentially millions of people), so the potential for future growth, just based on current use patterns, is clearly significant.

Commercial Users

Drones have been used extensively by the military for decades now and much of the impetus for the development of this technology has come from the development of such applications. 

The military will no doubt continue to provide an important impetus for innovation in drone technology.  However, these days, a wide variety of other commercial applications are emerging.  These are likely to prove increasingly important markets for drone tech suppliers in the future.  Key commercial areas where drones are now being used would include:

  • Journalism & film making; drones are increasingly providing the primary way for obtaining aerial shots.
  • Disaster management; in gathering information and getting emergency supplies to isolated areas following disasters such as earthquakes.
  • Search and rescue; when fitted with enhanced imaging and thermal cameras, drones can play a critical role in search and rescue operations.
  • Mapping: drones can map terrain features in locations that are difficult to cover by other means.
  • Law enforcement and surveillance; drones provide a relatively unobtrusive means of surveillance and allow observation to be undertaken without the need for a physical human presence.
  • Weather monitoring and storm tracking.
  • Building inspections; drones allow construction workers to view the exterior of large structures and gain detailed photographs of places that are difficult to physically access by other means.
  • Inspections of processing plants (e.g. for the oil and gas industry); any large structure can now be inspected by drones.  Detailed images, including thermal ones, can be taken of inaccessible areas, allowing maintenance engineers to view the state of equipment without being physically present.
  • Shipping and delivery; at present applications are being developed that focus mainly on the distribution of small packages. However, in the future, it may even be possible to transport larger cargos using large drones.

Developments

Virtually any application involving observation, or transport and delivery of small items are potentially suited to drone use.  One thing is for certain.  As the price of the technology reduces and the technology improves, it will become increasingly practical to perform a wider variety of commercially viable applications.

So, what further developments should we look out for in the future?

Logistics – Amazon Prime Air

Amazon have been working to develop a fleet of drones to deliver small packages as part of its logistics network.  One key potential advantage of such an approach comes from the fact that drones can avoid traffic and deliver packages by a more direct route (as the crow flies in some cases). 

The service will be called Prime Air and is currently being tested in several countries.  In the UK Amazon have recently doubled the size of their Prime Air team and we are likely to see the service launch in a matter of months rather than years.

Hydrogen power

Hydrogen is an emission-free fuel and has the advantage of keeping a drone airborne for longer. The technology first appeared in 2016 but we are now starting to see more hydrogen powered drones come onto the market.  The capability to remain airborne for longer makes them particularly suited for applications such as agriculture, mapping and for disaster response in remote locations.  Any application, in fact, where there is a need for a long flight time.

At present the primary barrier to hydrogen power is the cost but as prices come down and technology improves we can expect to see more hydrogen powered drones in the future.

AI and improved navigation

As more drones fill our skies it will become increasingly important for them to navigate their way around avoiding each other and various other safety hazards.

AI drones that use computer vision to detect and navigate their way avoiding other airborne objects and hazards are now starting to appear on the market. High performance on-board image processing coupled with other navigational aids will make this increasingly possible.  At present, of course, such technology is expensive, but we can expect to see it become more commercially available over the next few years.

Perching drones

Drones all have a limited amount of flight time available to them.  However, this can be prolonged significantly if a drone is able to land on a building or other high object and make its observations without needing to expend energy to remain airborne.

Various technologies are being developed to allow drones to do this; perhaps enabling a drone to ‘perch’ on a streetlight or to rest on the corner of a building.  This would have the benefit of making a drone more stable whilst it is making its observations as well as conserving power.

Problems and dangers

Of course, as drones become more ubiquitous, they bring with them their own unique set of problems and challenges.  Not least is the potential for this technology to interfere with existing air traffic or for it to be misused by criminals and even terrorists.

In 2019, the year before Covid cleared our skies of aircraft, UK aircraft pilots reported 91 confirmed incidents involving drones and a further 29 incidents that may well have been drones but were unidentified.  This compares to only 4 confirmed incidents involving drones and 1 unconfirmed incident that were reported in 2010.

This has prompted the UK government to introduce a registration system in 2020 and to require users of certain types of drones to obtain specific certification.  Now even hobbyists must hold a flyer ID and past a test to legally fly their drones in the UK.

Whilst such measures will no doubt serve to help minimise the danger of accidental incidents, the threat of criminal or terrorist misuse is a different matter.  In warzones, drones are already used for surveillance, to disrupt airspace and even to deliver small explosives. 

With new threats comes new technology.  Countermeasures of various kinds are being developed, these include directed energy weapons with the power to disable drones using such techniques as lasers, particle beams or radio frequency waves.  One of the latest uses high-powered microwaves to knock out a drone’s onboard electronics.

If future, we can expect to see measures of this kind deployed to protect airports and other sensitive potential targets.

The Future

It seems clear that the coming decade will see an increasing proliferation of drone technology.  This technology has grown from the highly specialised and niche use of a decade ago to a stage where it is now beginning to experience mass commercial and consumer adoption. 

The coming decade will see this technology becoming more ubiquitous as it develops further and the costs come down.  The challenges faced by drone suppliers will be to keep developing the technology at a rapid pace whilst remaining conscious of the public safety concerns.

However, the future is bright and no doubt there are many potential applications out there that new technological advances will enable drones to exploit.  There is also a potentially significant untapped consumer market.  As the technology reaches out to a mass market, so manufacturers will need to think increasingly about their marketing, and building strong and distinctive brand image and awareness amongst potential customers. 

It would seem that we are indeed on the verge of a drone revolution.

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future.  That means understanding change – whether that be changes in technology, culture, attitudes or behaviour. 

We have considerable experience in the design and execution of market research surveys in the field of both b2c and b2b science, engineering and tech markets.  We can offer a range of services to help you identify new market opportunities and to understand the position and strength of your brand in the market.  You can read more about this on our website.  

If you wish to follow our weekly blog you can view all out past articles on our website here.

Sources

Airprox

Amazon

BBC

Business Insider

CAA

Cloudemployee

Dronelife

Dronesdirect

FAA

Interesting Engineering

Pilot web

Reliability web

Sciencefocus

UAV coach

Your Story

UK Elections 2021 – How is the political landscape changing?

How is the political landscape changing? As the dust settles on the May 2021 elections, it is worth taking a closer look at the results to see what they might tell us.   

England

The overall results for labour have been bad across the English elections.  Labour has lost seats across many areas and, at the same time, the Tories have picked seats up.

Overall, the Tories have increased their number of councillors in contested areas by + 11%, labour have declined by -20%. 

The LibDems remain the third largest party but have seen little real change.

Other important highlights are that UKIP has now disappeared from the political scene and Reform has failed to hoover up those old seats.  The main beneficiary from the demise of UKIP has clearly been the Tories. 

There has also been a dramatic increase in the amount of Green councillors (more than doubling their number of councillors in contested areas to 151). 

One final important highlight is the fact that there have been gains across the board for a mix of independents (an 18% increase to 255 councillors).

Labour’s highest profile loss was, of course, Hartlepool.  However, here, the story has more to it than meets the eye.

Hartlepool

In Hartlepool the Tories saw their vote increase from 28.9% at the last general election to 51.9% on May 6th.   Much of this gain is likely the result of the disappearance of the Brexit Party as a meaningful political force.  25.8% voted BP in 2019 which, if added to the Tory vote at that time, would total 54.7% – similar to the Tory vote this time around.

Whilst this may explain the Tory win, it does not explain the reduction in the Labour vote (falling from 37.7% in the last general election to 28.7%).  Smaller parties like the Greens may have taken votes from Labour but as the Greens only accounted for 1.2% of the vote, this can hardly explain it.

One point to remember is that the incumbent MP was forced to leave office because of allegations of sexual harassment and victimization.  This may have served to turn some voters away from Labour – but the question remains that whatever their reasons were for not voting Labour, who did those voters turn to?

A big factor appears to have been an independent candidate – Sam Lee, a local businesswoman.   Sam positioned herself as someone who stood up for the local business community and a Westminster outsider.  A vote for her, she claimed, would “show politicians that we are sick of their party games and empty promises”. A vote for her then, was, in many ways, a rejection of the status quo.  Sam polled 9.7% of the vote and, as she didn’t stand in 2019, it looks like she may have taken a fair number of votes away from Labour.

No change..?

So, in 2021, it may be that Hartlepool saw no real significant switch from Labour to Tory at all – that had already happened in 2019, when large numbers of voters changed to the Brexit Party.  And having switched to the BP, the move to voting Tory seems to have been an easy step for many. 

The vote for Sam Lee is significant though.  It shows a considerable number of people prepared to vote for someone outside the political establishment, and a desire amongst many for something quite different from the established parties.

The Red Wall weakens in the North and Midlands

In general, results in the North and Midlands have shown the biggest Tory gains plus the most serious Labour losses.

Again, the explanation seems to lie mainly with picking up former Brexit Party voters rather than outright direct conversion of 2019 Labour voters. 

The biggest Tory gains compared with previous local elections were in Yorkshire and Humberside (+11.2% up), the West Midlands (+9.7%) and the North East (+7.3%).

These marry up with the more significant Labour losses – Yorkshire and Humberside (-4.5%), the West Midlands (-5%) and the North East (-4%).

Labour losses and Tory gains were less significant elsewhere in England.

So, are we witnessing a sea-change in voting patterns in the North driven by regional factors or is it something more complicated than this? 

It is true that the so-called Red-Wall has clearly been seriously eroded in many parts of the North.  However, Labour has performed well in the area in certain large cities.  Could it be that this is more about how voting patterns are changing in metropolitan v non-metropolitan areas, than it is about changing attitudes in the North?

The Metropolitan Effect

Labour has performed well in northern metropolitan areas such as Liverpool and Manchester, showing that it can hold its own there under the right conditions.

In Manchester, Labour even gained ground.  Perhaps this was due in no small part to the charismatic Andy Burnham but the numbers tell a convincing tale.

Labour increased its share of the vote on the first choice for Mayor from 63.4% in 2017 to 67.3% in 2021. The Tories slipped from 22.7% to 19.6%.  Here, the lesser parties were very much out of the picture.

The Labour Mayoral vote also held strong in Liverpool.  No sign of any cracks in the Red Wall in these major northern cities; a quite different story from the story we see in less urban areas. 

So why is the metropolitan vote in the North so different from the trends we see elsewhere?

The Role of ‘Englishness’

Will Jennings, Professor of Political Science and Public Policy at Southampton University, feels that the migration of voters to the Brexit Party and then to the Tories has much to do with the emergence of a strong English national identity.  This tends to view the Tories as a party that is positive about the English and Labour as essentially mediocre about, or even hostile to, an English cultural identity.

Evidence for this can be found in BSA research that looked at the motives behind voting Leave/Remain in the Brexit vote.  This found that people who identified themselves as ‘British’ and not ‘English’ in England, voted 62% in favour of Remain.  However, 72% of people who identified themselves as ‘English’ and not ‘British’, voted in favour of Leave.

This sentiment, Jennings would argue, has translated into a vote for the Brexit Party in 2019 and has now converted into a Tory vote.  Parts of the North which have switched to Tory are often areas where this sense of ‘Englishness’ is strongest.

However, cities such as Manchester and Liverpool are more cosmopolitan in character and have strong and distinct local identities (as Mancunians or Scouse).  As a result, the tendency to strongly identify with an ‘English’ nationalist identity is less evident.  This in turn translates into a much-reduced willingness to switch away from Labour to the BP or Tories.

Treating the ‘North’ as a single homogenous area would therefore appear to be a gross over-simplification.

A different picture in Southern England

In the South, there was less dramatic change in voting patterns.  Although we saw some shift to the Tories in the council elections, the change was nowhere near as significant or dramatic as that seen in political landscape in the North.

However, there are a couple of interesting results that are worth pulling out – both Labour Mayoral wins.

The first is the result for Cambridge and Peterborough.   On the first choice alone, the Tories would have won (Tory 41%, Labour 33%, LibDems 27%).  However, once the LibDems were knocked out of the picture the second-choice votes for these voters were overwhelmingly Labour.  The result enabled Labour to win (just) by 51%. 

The second result is for the West of England Mayor (which covers Bristol, Bath and North East Somerset and South Gloucestershire).

Here Labour increased its vote from 22.2% to 33.4% in the first round.  The Tories also actually did a little better (increasing from 27.3% to 28.6%).  The LibDems, again, saw limited but negative change (20.2% down to 16.3%) and the Greens again, saw progress (up to 21.7% from 11.2%). 

Again it is worth noting that the presence of a strong independent candidate can affect the results.  In 2017 such a candidate polled 15% of the vote but this time around, no such candidate stood.

This does raise the possibility that a future cooperative arrangement between Labour, Greens and LibDems in the south could potentially cause significant damage to the Tories in some parts of the southern political landscape.  However distant and unlikely such a prospect might seem today.

What about Scotland?

The results in Scotland, of course, have been quite different from anything we see in England.

Here we have seen the SNP make modest progress – increasing their share of the vote from 46.5% of constituency votes at the last parliamentary election in 2016 to 47.7% now.  The Tories saw little change in fortune (21.9% share now vs 22% in 2016).  Labour, too, saw limited change (21.6% down from 22.6%).

The SNP have consolidated and built on their dominant position even if they have not achieved an outright majority.  Some have suggested that they owe their electoral success at least in part to the general perception that Nicola Sturgeon has handled the Covid crisis well. 

One might make a similar observation across the UK.  This is that the light beckoning at the end of the Covid tunnel tends to favour the incumbent administrations – the SNP in Scotland and the Tories in England.  There is no doubt some truth in this and, if so, we can see this pattern repeated in Wales.

What about Wales?

Wales bucked the pro-Tory trend we see in England.  Here comparisons with England are more interesting because Wales, like England, voted Leave (whereas Scotland did not).  However, UKIP and latterly the Brexit Party have never been quite the force in Wales that they were in many parts of England (the Brexit Party registered only 5% of the Welsh vote in the 2019 election). 

Here the Tories have not managed to benefit anywhere near so much from picking up former UKIP or Brexit Party voters.  In 2016 the Tories got 21.1% of the constituency vote, which they have been able to increase to 25.1% this time around.  This no doubt reflects picking up some of the old UKIP votes (which accounted for 12.5% of the votes in the 2016 assembly election).

However, in Wales Labour have increased their share of the vote from 34.7% to 39.9%. Plaid Cymru have remained at pretty much the same level (20.7% vs 20.5% last time).

As with elsewhere, it may well be that the incumbent administration is benefiting from the feeling that we are headed in the right direction Covid-wise. 

The lack of the BP/UKIP factor in Wales in the political landscape meant there were only a limited number of these voters for the Tories to potentially pick up.  This supports Professor Jennings’ view that it is the sense of Englishness that has driven a migration of votes from labour, via UKIP and the Brexit Party, to the Tories.  The absence of the ‘Englishness’ factor in Wales potentially explains why such a pattern has not been repeated here.

In conclusion

It is probably worth concluding by saying that we ought to be very careful in what we read into these results.  The 2021 elections have occurred at a time when so much is in a state of flux.  The Covid crisis makes these times most unusual indeed. 

In a few years’ time when (hopefully) Covid no longer dominates our lives, we will be living in a vastly different world.   Also, we cannot yet say what the longer-term impacts of Brexit may be.  We are also only at the very beginning of the Tory levelling-up agenda.  Much has been promised, but what will be delivered?

This election has highlighted some important emerging trends, but the events of the next few years could yet see things change quite radically.

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future.  That means understanding change – whether that be changes in technology, culture, attitudes or behaviour. 

We offer market research services, opinion polling and content creation services.  You can read more about this on our website.  

If you wish to follow our weekly blog you can view all out past articles on our website here.

Sources

Election Results from BBC England

BBC Scottish Election Results

Welsh Election Results from the BBC

Sky News Election Takeaways

BSA

Hold the Front Page

What can Cyberpunk 2077 teach us about brand reputation?

Promising Greatness

When Cyberpunk 2077 launched with considerable marketing and general industry hype at the end of 2020, it was a game that promised greatness.

A lot of people were predicting that Cyberpunk 2077 would be the big game of 2021.

CD Projekt Red had established an enviable reputation for quality on the back of the success of its Witcher franchise.  And the early signs were all good.  The setting, the graphics, the story and the atmosphere of the world they’d created all received praise and the pre-launch marketing led to incredibly high volumes of pre-orders for the game.

The stage was set for the game to really explode. 

Hitting problems

However, as we all know, not long after its launch, Cyberpunk 2077 hit problems.  Numerous bugs and performance issues came to light that eventually led to it being pulled from the PlayStation store.  It seemed to have particular problems running on the older console technology.

It wasn’t long before refunds were being offered.  If anything the high profile hype surrounding the launch made matters worse.  The actual delivery had clearly not matched the high customer expectations.

CDPR were now looking at a damage limitation exercise.  The reputational cache their brand had cultivated over the years was now under serious threat.

“It takes many good deeds to build a good reputation, and only one bad one to lose it.”—Benjamin Franklin

Ongoing Problems

Ever since then, CDPR have been working hard to issue bug fixes.

As Gamesrant noted in mid-April “The 1.2 patch notes for Cyberpunk 2077 are the length of a short novella and show a lot of changes.”  But despite this the game still seemed to suffer from more bugs than an anthill. 

It is clear that all this has had an impact and CDPR’s reputation has taken a serious knock amongst its fanbase.  Comments on the steam community posted in April 2021 make it quite clear that the game still faced some serious unresolved problems, even at this time.

“To begin i wish to say i was a Gigantic fan and supporter of Cdpr and this game.  Regardless too many things sold this game to me and i got none of them.”

Mind you, some people still felt Cyberpunk was value for money, even if had not met expectations:

“I look at it this way. I got my money’s worth out of the game even though the experience wasn’t as good as I’d hoped.”

Hype?

And some felt that the pre-game overhype was the real problem here and that those people who bought games on pre-order were potentially setting themselves up for disappointment:

“That’s a ‘buyer beware’ problem.”

Such comments by fans may have been made in defence of CDPR but they also reflect a view that other fans got their fingers burnt precisely because they believe the pre-launch hype and pre-ordered the game.

The potential lesson here that some fans may well take from this is therefore twofold:

  1. Don’t believe the pre-launch marketing (or at least, don’t take it at face value).
  2. Don’t pre-order.

However, the potential longer term damage to CDPR’s reputation could be a good deal more serious, judging by some of the comments:

“I’m just dumbfounded how a company could make a blunder like this. They were in a position that was coveted by large corporations, true customer loyalty and customer love. They didn’t even need a marketing department.

…Now, they are relegated to being just any other gaming company.”

How did it happen?

How could CDPR go so quickly from hero to zero, in the eyes of many of its fans?

Obviously, this was originally a problem caused by rushing an unfinished product to market too quickly.  This would not necessarily have been an issue but for the pre-launch marketing hype that had raised expectations so high.

The scale of the problem was at least partly acknowledged by Co-CEO Marcin Iwiński who issued an apology to fans in January and admitted that CDPR had “underestimated the risk” they had faced in developing the console versions of the game.

Iwiński took responsibility for what had happened and urged people not to blame the developers.  This appears to have been acknowledged internally by ditching plans to link developers’ bonuses to game review scores.

You have to have some sympathy for the CDPR developers.  I’m sure those guys set off with the intention of making the best game possible.  But, as Jason Schreier of Bloomberg News highlighted, several developers felt the deadlines set were over ambitious, given the relative lack of adequate resourcing to meet them.  Unfortunately, you can be the best developer in the world, but if you are forced to work with silly deadlines and overambitious targets you are simply being set up to fail before you even start.  I think you’d have to be a bit hard hearted not to feel their pain. 

Overall, then, it looks like it all comes down to a classic case of overambition.  Overambition in terms of what CDPR set out to do with the technology, overambition in terms of the timescales they set themselves to do it and overambition in the marketing hype they created for the game leading up to the launch.

Ambition is good.  But when the gap between stated ambition and reality becomes wide enough, that’s when you end up with problems such as those that have plagued Cyberpunk 2077. 

How has it impacted on CDPR?

Despite its problems the pre-orders and the initial rush of sales for the game tell a story of financial triumph.  Cyberpunk 2077 pushed CDPR’s 2020 sales to record levels – $562 million (compared to previous record best year of $210m in 2015).

Superficially that would appear to suggest that, despite its problems, Cyberpunk 2077 has nevertheless been a huge success.

However, the $562 million figure is largely the result of the pre-orders, which were driven by the pre-launch marketing rather than by the actual performance of the game.  It also does not fully factor in refunds that followed in the new year.  Nor does it factor in the longer-term costs of all the extensive bug-fixing that followed.  We don’t yet have crucial information on how well the game has faired in terms of sales in 2021, post-launch.

The longer-term impact of the game’s problems may ultimately be that the game fails to perform as well as it might have done.  At one time it was heralded as the big blockbuster for 2021.  And the initial sales looked like the game was very much on track for that. 

In December 2020 it achieved the fourth highest ever number of concurrent players on Steam.  However, at the start of May 2021, it now ranks #62 on Steam – that’s lower than the ranking held by CDPR’s previous blockbuster (Witcher 3).   CDPR’s stock price also tells a tale (dropping by nearly 18% between 6 April and 5 May 2021).  These are not good signs.

Reputation

However, the short to mid-term impacts on CDPR’s financial performance is unlikely to see them turn a loss.  More likely, it will simply see the company struggle to make the kind of money from Cyberpunk 2077 that was envisaged back in the heady days of last November.

More damaging for CDPR may be the longer-term reputational damage.  This might make it very difficult to persuade anywhere near as many fans to pre-order their games in future.  It may also mean that future marketing will not be believed. After all, no one believed the boy who cried wolf, even when the wolf really was coming.  It may also mean that fans will adopt a wait and see policy on their future games – delaying buying until they are able to read customer reviews that confirm that any new release is genuinely up to scratch.

Re-building Reputation

CDPR are not the first company and will not by any means be the last to suffer reputational damage of this kind.  This has happened before in other industries outside gaming.  It is easy to list examples once you start to look; VW emissions scandal, Whirlpool product recall, BP Deepwater Horizon and so on.

A classic case in how to manage such crises is in Johnson & Johnson’s 1982 recall of its best-selling Tylenol painkiller after seven people died in the Chicago area from cyanide-laced capsules.  The key to getting on top of it was to act fast and to be as transparent as possible.  The company incurred a large cost at the time but because they acted so fast, the crisis was over fast.  Their share price recovered within a year.

Samsung provide a more recent example in their response to exploding mobile phone batteries for their Note 7 product in October 2016.  The company realised that its long-term reputation was far more important than any short-term financial hit and invested a considerable amount of money and resources in solving the problem.  They deployed 700 researchers and engineers to test over 30,000 batteries in every extreme condition possible. They even invited in third party auditors.  Once they had identified the problem (by January 2017), they communicated it to the public and announced a new quality assurance program and safety features in a bid reassure consumers.

Samsung’s market share of the mobile phone market today is now very similar to what it was in 2016.  It has consistently managed to maintain a market share of 20% or higher in every year since the crisis.

Lessons Learnt

Reputational damage is the real threat to the future success of CDPR.  Others have been there before and offer some clear lessons as to how to respond to such issues.

First, you need to understand the scope of the problem – both in terms of the actual product issues and in terms of how these have impacted on customer perceptions. 

Then, secondly, you need to act fast and decisively. Don’t skimp on resources. Get the issues sorted out as fast as you can, even if that means taking a significant cost hit in the short term.  Throw resources at it.

Thirdly, you need to be transparent.  Explain the full extent of the problem to customers, what you are doing to fix it and provide realistic timeframes (that you stick to) in terms of sorting it all out.

Fourthly, you need to recognise that you have a PR problem.  Even if you solve the actual product problems, you need to communicate this effectively and keep reinforcing it until the message gets through.

Finally, you can’t be the boy who cries wolf and constantly promise to sort things out, but then shift the deadlines, or offer up only partial solutions that fall short of expectations.  That is the sure-fire way to make things far worse for yourself in the long term.

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future.  That means understanding change – whether that be changes in technology, culture, attitudes or behaviour. 

We offer market research services and opinion polling to clients in the gaming, media and leisure industry.  You can read more about this on our website.   We can also help provide market research that will enable your business to understand and track your brand reputation with customers.  You can read more about this service and about how to use market research to help manage your brand reputation here.

Sources

BBC

Bloomberg

Businessinsider

Counterpoint

Denofgeek

Entrepeneur.com

Gamerant

Harvard Business Review

IDC

Pushsquare

Steamcharts

Steamcommunity

TechRadar

The Verge

The Bionic Man – will science fiction become reality?

We think of the bionic man as an idea from science fiction.  Perhaps some of us remember the TV series from the 1970s (The Six Million Dollar Man) and its spin-off – The Bionic Woman

A great fictional concept but very much the stuff of science fiction – something for the far future.  But perhaps that future is a lot closer than we might think.

A few years ago, I met a fellow at the MedTec trade show in Stuttgart. He worked in the field of bionics.  During a relaxed conversation at the bar, he told me, with no small degree of confidence, that the day will come when science allows us to replace amputated limbs with bionic replacements. 

These replacement limbs will not be simple prosthetics, they will be bionic limbs, fully integrated with the human nervous system, capable of working just as well (and possibly better) than the original amputated limb.

What is more, he believed we would see such technology in our lifetime.  It sounded incredible but he was deadly serious.  It is not a question of if – only of when.

Limb loss affects millions

Every year in the USA, 185,000 people have limbs amputated.  Across Europe that number is even higher at 431,000.

The impact of limb loss (whether it be an arm or a leg) on a person’s life is major.  Modern prosthetics can allow an amputee to regain a degree of independence but, at present, can never serve as an adequate replacement for the original limb.

However, it is theoretically possible to develop the technology that will replace a lost limb with a fully functioning bionic replacement.  And the day will eventually come when bionic limbs will work just as well as the amputated limb they are replacing.

Human limbs move the way they do because nerve impulses from the brain tell them what to do.  When to grip a mug, when to point, when to scratch your nose.  These impulses are electrical signals.  Robotics also works on the same basic principle – electrical signals, sending instructions that cause a robot to move.  So, in principle, it is just a case of marrying the two together to create a true bionic limb, operated directly by signals from the human brain.

But how close are we to possessing such technology?

The LUKE Arm

On July 4th 2017, two US veterans with arm amputations became the first people to be fitted with an early form of bionic arm.  The device might be described as an enhanced prosthesis.  DARPA (Defence Advanced Research Projects Agency) developed it as part of an ongoing program to revolutionize prosthetics.

The LUKE arm can perform fairly dexterous arm and hand movements, enabling an amputee to pick up even small objects such as a grape, to open doors and to drink from a mug. 

A battery powers the arm, but is not truely bionic, in so far as the human nervous system does not directly control it.  Control switches of various kinds (for example located on the feet) get the arm to perform a wide variety of tasks.

It is currently one of most advanced robotic prosthetic arms that is commercially available (currently sold by Mobius Bionics).

If you’d like to see the arm in action, I have included a video link at the end of this article.

Developments in the Brain Machine Interface

A true bionic arm would have the articulation of the LUKE arm but would be directly controlled by the human brain.  A neural link would need to be created by surgery to connect wiring in the arm with the amputee’s nervous system.  This would then enable the arm to operate just like a biological arm.

Ongoing research by DARPA in association with John Hopkin’s University’s Applied Physics Laboratory (APL) and School of Medicine (SOM) has demonstrated that it is possible to control fully articulated artificial arms with electrical signals from the human brain.  This is not quite the same as a direct, permanent, surgical link but it does demonstrate what will be achievable. 

You can see it in action for yourself in a video link at the end of this piece.

The technology now exists that creates a functional brain machine interface.  The next step will be to surgically integrate a bionic arm with a human patient to create a permanent, fully functioning, replacement bionic limb.

The first true bionic arms

Scientists at Gothenburg’s Chalmers University successfully developed and fitted a true bionic arm to two men in Sweden in 2020.  The arm may not have the full, extensive, fine manipulation articulation of a normal human arm, but nevertheless electric signals from the human brain directly control it.

The arm prosthesis was implanted through a process called osseointegration – that is surgically attached to the bone, muscles, and nerves.  In trials the patients were able to use the arm quite comfortably throughout their normal daily activities. 

This incredible development essentially provides an amputee with a bionic arm that operates as easily and almost as well as the original limb.

Again, if you’d like to see Rickard and Magnus using their bionic arms, there is a video link at the end of this piece.

The Future

The next stages of development for this technology over the coming twenty years will be very exciting.

The three main challenges science needs to address now will be:

  • Creating a neutrally integrated limb with considerably more nuanced manipulation capabilities.  Here, the bottleneck is the neutral interface (the sensor technology already exists to facilitate it).
  • The development of advanced Haptics to provide increasingly realistic sensory feedback from the bionic limb to the human brain.  Here again the challenge is the neural interface.
  • Making the technology available in an affordable form to all amputees.

So, when are we likely to see a world in which all amputees can benefit from fully functional replacement bionic limbs?

Given the current state of the technology we are likely to see some very sophisticated bionic limbs developed and successfully trialled over the coming decade.  We may even start to see significant numbers of amputees able to start benefiting from the technology by 2030.

Ultimately the key will come down to delivering solutions that strike the right balance between their effectiveness and cost.  But I feel optimistic that within 10-20 years the lives of a great many amputees across the world will be dramatically enhanced for the better by this technology.

About Synchronix

Synchronix is a full-service market research agency.  We believe in using market research to help our clients understand how best to prepare for the future.  That means understanding change – whether that be changes in technology, culture, attitudes or behaviour. 

We offer market research services and opinion polling to clients actively campaigning on behalf of the environment and engaged in the green economy.  You can read more about this on our website.

Video Links

The LUKE arm in action

See APL’s brain machine interface controlled robotic arms in action

Rickard Normack & Magnus Niska using their bionic arms (you will need to turn on sub-titles for this one, unless your Swedish is good!)

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