“A PESTLE analysis is a framework to analyse the key factors influencing an organisation from the outside… senior managers can use the results of this analysis to guide strategic decision-making.”
Source: CIPD
The following PESTLE analysis evaluates Neighbourhood’s business context and its strategic relevance under these headings. We will continually evaluate and update this as a living document as we operate and grow Neighbourhood:
- Political
- Economic
- Social
- Technological
- Legal
- Environmental
Political Context
It is 14 years since Facebook launched, and it is now used by over 2.167 billion of the world’s population. After the explosive growth of social media applications, we are entering a period of heavier regulation and scrutiny of their practices, particularly in the areas of data processing and user privacy.
Globally, the EU is leading the world in this respect with GDPR, and the UK is following suit with its new Data Protection Bill. This context is especially relevant to Neighbourhood, a ‘privacy by design’ application, whose business model does not rely on the selling, sharing or combining of data, nor on common digital advertising methods.
Economic Context
Neighbourhood is first launching in the UK, so this local economic context is of most relevance, as well as broader trends.
Local high streets are changing, with retail being replaced with places for people to sit, eat, drink, and engage in leisure activities.
This 2017 Business Insider article sums up this trend toward experiences, which Neighbourhood is perfectly placed to support:
- British High Street in flux as shops close, sales fall, and visits decline.
- The rise of online shopping is to blame, with traditional retailers struggling to adapt.
- But experts say High Streets will adjust rather than disappear — expect to see more coffee shops in supermarkets, DJs in clothes stores, and other “experiences” to draw people in.
Source: Oscar Williams-Grut, Business Insider
Due to the way in which people are shopping online, customer reviews have becoming increasingly important. But these are being ‘gamed’ – with companies buying five star reviews. This phenomenon has been documented by the BBC:
Fake online reviews are being openly traded on the internet, a BBC investigation has found.
BBC 5 live Investigates was able to buy a false, five-star recommendation placed on one of the world’s leading review websites, Trustpilot.
It also uncovered online forums where Amazon shoppers are offered full refunds in exchange for product reviews.
Neighbourhood’s direct connection between transaction and review, trusted users, and the fact that we do not make available the identity of our users, means we offer a far more reliable and trustworthy reviews system. Please find out more about this here.
Social Context
Following on from the above, while digital devices, connectivity, and social media are taking up a huge amount of people’s time, there is a yearning for ‘real’ experiences.
The Truth About Youth study from McCann Truth Central, McCann Worldgroup’s global intelligence unit, suggested that today’s youth should not be seen as ‘Digital Natives’ so much as ‘Accessibility Natives’, wanting to reach people, places, ideas, and brands anywhere at any time.
Technological Context
Social media use continues to grow around the world, despite the controversies mentioned above, and messenger apps are driving a lot of that growth, in comparison to the dominant and established social media platform, Facebook.
Neighbourhood will take advantage of technological trends, that have increased users’ openness to messaging applications and location aware services on their smartphones. However, in line with our strict privacy and trust policies, we will use location data only as directly relevant to user context (e.g. wanting to find out about activities right now near them) but we will not store their locations nor make their locations visible or available to other users.
Legal Context
The UK’s new Data Protection bill, which aligns with GDPR, is the regulation of most relevance to the launch of Neighbourhood. Presenting both a range of considerations for its design (see this post for more details), and also a great opportunity for Neighbourhood, to be marketed as a genuinely innovative privacy-first business.
Environmental Context
The environmental movement has had great success in moving issues such as climate change and air and plastic pollution into mainstream consideration and national policy. The UK government recently released an ambitious twenty five year environmental plan. And it has been shown by large global organisations such as Unilever, that brands with ‘purpose’, which they now call ‘Sustainable Living Brands’, perform better than those which fail to put social and environmental considerations at the heart of their operations.
There are several areas of environmental and conservation consideration relevant to Neighbourhood. As a business we will position ourselves as part of maintaining a healthy, fun neighbourhood, which includes a sustainable environment. We will focus on these three areas for our environmental strategy, which align with the UK government’s environmental targets:
Clean air: Neighbourhood can be part of reducing pollution-causing travel by helping people take greater advantage of activities and ways of pursuing their interests closer to home. Furthermore, we will actively encourage the use of public transport and car pooling for travel to and from activities.
Thriving plants and wildlife: Neighbourhood will actively support activities and seek partnerships that relate to conserving local ecology. For example, tree planting and wildlife preservation activities.
Minimising waste: Neighbourhood will give special preference in its marketing to partners that demonstrate best practice in reducing waste and the use of plastics.
PESTLE image adapted from biba.com.au