Magazine article Marketing

Caution by Design

Magazine article Marketing

Caution by Design

Article excerpt


"There is still scope for a more professional approach on behalf of design agencies." "The UK design business . . . is growing daily in sophistication and ambition." Two sober statements that, with hind-sight, look more like ironic epitaphs. They come from two landmark publications on the design industry: The Design Consultancy Marketplace by stockbroker James Capel, which was published in 1988, and British Design Consultancy - Anatomy of a Billion Pound Business issued by the Design Council in 1987.

Both reports are stuffed with facts, figures, estimates and rumours about a strange and exotic service industry, one which seemed to have metamorphosed overnight from a neglected and misunderstood child into a swaggering tycoon ready to dole out largesse to all and sundry.

Now, however, things are rather different. James Capel, for one, no longer covers the design industry. Plummeting share prices, redundancies, relocations and refinancing packages have dominated the first half of 1990. High profile names like Michael Peters, Fitch and Conran Design have all been shocked out of complacency. The industry has suddenly found itself at the crossroads.

A new mood of caution is evident everywhere, and panic is not far from the door. Getting one's house in order, tightening one's belt - these are the orders of the day. Yesteryear's cry of Big is Beautiful has suddenly become a muted muttering about survival of the fittest.

For many, the choices are limited: cut costs, refinance, sharper management. But this only displaces the client's dilemma. Here is a chance to cut costs and demand more of consultancies jostling for work. But clients have a worry - will their consultancy go bust? Should they take work in-house or transfer it to a safe house? If they press to hard, design consultancies' quality of work may suffer.

As the economic squeeze turns into more of a bear hug, marketers inside companies are also wondering how they can expect to keep design as a high priority on overstretched marketing budgets.

Among consultancies, the conventional wisdom is that client loyalty is paramount. Designers must throw off their old jobbing approach to work and replace it with a greater emphasis on the strategic value of design.

But is it perhaps too little, too late? After all, have businesses really become "design-literate"? Or did they just have a lot more money to spend on glossy extras?

Design, of course, is many different disciplines - ranging from technical product design and cardboard boxes through to pretty company logos. Each offers a very different challenge.

Take retail design. Its meteoric rise and fall sums up the problem of the whole industry: all the more starkly because it has been so visible.

"We all got a bit full of our own bullshit," begins David Mackay, a partner at Crab-tree Hall. "We were all guilty of encouraging retailers to think of design as a panacea to all their problems."

According to Mackay, clients became disillusioned with design because they saw first-rate fees charged for second-rate work. Clients realised that they were paying good money only to end up blending in with the crowd: instead of standing out.

A second generation of clients is now looking for a much greater return on its design expenditure. The weak players, such as those designers who cannot integrate market research into their service, will simply fall by the wayside. So, too, will the consultancies which continue to hold on to inflated overheads.

David Rivett, development director at Fitch RS agrees. The company has now cut about 10% of its staff, mainly in its architecture and retail divisions. "It's a distressingly large number of people, but some of the smaller design firms have had to get rid of up to 70% of their employees."

But Rivett is far from convinced that retail design has reached the end of the road. …

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