The end of inefficiency: when prompt becomes default

Richard Nicholls, The Future Foundation, says never before in history have customers been so well guided towards making good choices in the markets they inhabit…

So many trends spin on the question: how to achieve really good outcomes in possibly very complex situations?

The question is: what happens when we realise that the process of conventional choice-making and option-reviewing can lead us all to sub-optimal outcomes? What happens when we know we should put our faith in intelligent agents to make optimised decisions for us?

Our conjecture: Increasingly, consumers will acknowledge to themselves that choice-process is less valuable to them than experience-outcome – and behave accordingly inside markets. (We wait for proof.)

What happens when the consumer realises it is just not optimal to depend on his/her individual point of view or even experience when making commercial choices, large and small?

Consider the number of products and schemes which would limit the discretion of the driver. Platooning – organised and electronically controlled motorway driving – is being trialled in Europe in 2011. And some products such as Ford’s MyKey can pre-regulate the speed at which a car can be driven, how much the internal music can be amplified, etc.

Our premise is that increasingly we, as consumers, will not mind being told what to do if we see that it is in our interests not to follow our own instincts and not just to take good app-delivered advice but to let intelligent systems automate our decisions for us.

The 21st century consumer is entering a world of ever more sensitive, ever more creative service-intermediation and will not mind, in the end, withdrawing from personalised decisions when systematised decisions will give better results.

The Future Foundation tracks all kinds of service innovation – in the fields of healthcare, motoring, food storage and nutrition, TV scheduling, energy conservation – in which very focused advice is given to individuals about how to behave, what to do, what to choose. Invariably, such systems can internalise previous behaviour or established preferences to give highly concentrated and valuable advice. One has to imagine that it is but a short step to actually taking decisions for people and not waiting for a direct signal from them.

We have been tracking such how price-sensitive British consumers of all contexts and incomes have become. The chart shows how virtually universal this motive is.

And we see from these figures just how ready millions of us are to receive prompts, which allow us to pounce on discounts the moment they appear – a real issue in a time when there are very few perma-fixed prices any more (for flights, hotel rooms, rail tickets…).

In the future, if there is a service which can scan, say, electricity tariffs for us and automatically switch our accounts in favour of the cheapest (or, if it is our expressed wish, the most ecologically sensitive) supplier then we have to assume that millions will be in favour of such an idea. Already in the USA there are intermediary services, which are virtually doing this already in the field of personal savings.

Of course, the End of Inefficiency is more likely to alight on some markets more than others. Not that many people will want an automated service to select their winter wardrobe for them or choose their children’s Christmas presents. But in relatively low-interest markets, the appeal of a service, which does all the boring sifting-and-choosing for us must be, in ways still to be explored, intense.

In these following examples, we look at just how advanced some service propositions have become:

Ocado’s “your instant shop” service creates a “suggested order”, based on customers’ Ocado shopping history. It works out what they usually buy, how often and how much. The suggested order can be adjusted or the customer can let Ocado do all the ordering work for them.

Clicker claims to be the “complete guide to internet television”. Clicker says it eliminates painful complexity by providing a comprehensive catalogue, detailing exactly what is available to watch and where. To achieve this, Clicker styles itself as “one part directory, one part search engine, one part wiki, one part entertainment guide, and one part DVR”. The site will also recommend new content based on your viewing preferences.

Soon, intelligent TV sets will have pre-ordained (in ways that mainstream scheduling does already for every viewer) programme sequences waiting for us when we get home – sequences responsive to our interests, our preferences and our moods.

Smart Fridge: by Ashley Legg

This smart fridge knows what is in your refrigerator and can intuit (from the food within) various possible recipes. It will then display this recipe on a touchscreen panel mounted in the door and will guide you with vocal instructions. The idea is to give you a fridge that is intelligent enough to prescribe a healthy recipe, depending on what you stock in it. Currently, of course, you have to record which food items you place in the fridge with the touchscreen panel.

Fridges are growing into a mix of food critic, butler, advice-giver, recipe-provider, intelligent friend. It seems as if the technology concerned has but an extra small step to take before it can totally optimise our weekly selection and delivery of groceries.

Microsoft’s HealthVault allows individuals to open online health accounts in which information relating to personal health and fitness – such as prescriptions, check-ups, health records – can be stored in one place and interrogated over time.

Significantly, personal health information can be shared with local hospitals and other state bodies and even local fitness centres and employers. The service, available in the US and UK, launched in China in late 2010.

Very soon, the state of our personal health will be so well logged and monitored that we will not only get prompts to take more exercise or cut back the doughnuts but the gym will be automatically booked for us if we are getting overweight and our employer will automatically give us a day-off if we are getting over-stressed.

The End of Inefficiency – The proposition in summary

Never before in history have customers been so well guided towards making good choices in the markets they inhabit.

Word-of-mouth, comparison websites, recommendation vehicles, buying groups, consumer-advice TV programmes and lobbies… populate the brand-universe.

But what happens if/when customers learn to optimise their decision-making by minimising their own discretion, by letting smart systems make the choice-iterations for them – not merely directing them to good outcomes but automatically making the best outcomes happen?

For more, contact Richard Nicholls at the Future Foundation on 020 3008 6103/ richardn@futurefoundation.net