The IRL Fetish puts a new perspective on things, though, and argues that there is no such thing as being either online or offline – the two are intrinsically intertwined. As The Verge wrote in their discussion of the piece:

…Offline interactions are precisely what drives the churn of information on networks like Facebook, and that the internet actually allows us to appreciate the real world in a way we would have taken for granted before. The next time you’re hiking up a mountain, relieved to be free from the constant chiming of email notifications? You couldn’t get that feeling without an email account.

These distinctions between online and offline, between between being plugged-in and being unplugged, have weighed on me somewhat as I prepared for vacation. Six months ago, I was introduced to three versions of being “out-of-office” at Undercurrent:

Because we have no official vacation policy, we are encouraged to decide which version of out-of-office we want to be, and to plan accordingly – give enough notice, delegate responsibilities to teammates, notify clients, and set an appropriate auto-responder email.

Once upon a time, there were only two versions of being out-of-office – you were either working from home (or traveling to be with a client), or you were on vacation. And when you were on vacation, you were generally unreachable except via bat phone if something went seriously wrong. Being out-of-office and on vacation but still “online” is a more recent development – a hybrid option of these two states – and it is arguably the most tricky to navigate since the out-of-officer exists in a sort of limbo state, both actively thinking about work and not at the same time.

This limbo state can be experienced not only while on vacation, but during the weekend when days spent brunching with friends or visiting a museum will be punctuated by the buzz of an email (because someone will always be emailing on a Sunday). Having true “balance” of work and life these days is harder to achieve than ever, because more and more, “taking time off yet on email” seems to be the easiest mode to slip into – even if you are trying to enjoy option 3 and going “off the grid,” you will still be thinking about how full your Inbox is getting.

In the end, these three tiers of being out-of-office are functionally practical and reflective of the contemporary realities of doing business. Several studies have explored technology’s effects on the expectation of instant gratification, and managing those expectations is critical in preventing misunderstandings and generally keeping things moving while you’re away.

But setting your own personal expectations and acting accordingly in turn could mean the difference between rerouting an email while sitting on a hill, and taking in the full experience of watching a foreign city buzz from a spectacular view over a long weekend. Sure, we will not psychologically be able to be truly “offline” anymore. But we, for the well-being of everyone here, enthusiastically encourage its analog – deleting the Inbox from your phone from time to time and making the decision to return later.

If you spend a day shopping, you’ll repeatedly hear the question, “Are you a member of our loyalty program?” Loyalty programs are expanding, which is not surprising given that today’s highly competitive marketplace has made having one a no-brainer. Most, even the most ill-conceived, tend to produce small, single-digit gains which, at scale can add up to hundreds of millions of dollars. Of course, loyalty can mean different things to different people. To industry insiders, loyalty largely means how often consumers visit and how much they spend. But loyalty is also an emotional state, one that is earned (not bought), and based on real world experiences.

For example, Moe’s Southwest Grill pushes a fairly standard buy-nine-get-one-free program. Meanwhile, Chipotle is one of the fastest growing and most valuable fast casual restaurants in the world - with no loyalty program whatsoever. Does that mean Chipotle is beyond loyalty? Absolutely not. But a punchcard won’t do much for them. A brand with real loyalty is going to want a more complex and nuanced loyalty program that can trigger more sophisticated and valuable behaviors. Every brand should want those things. In that spirit, here’s a list of four ways most traditional loyalty programs leave money and love on the table.

1. The program comes with a physical burden. The average consumer has thirteen loyalty cards. It’s impractical to carry that many, so loyalty programs lose. Even those who offer to look up accounts by phone number suffer from the path of least resistance (consumers decline). Luckily, many signs point to loyalty moving to mobile phones with NFC or specialized apps.That future can’t come soon enough.
2. The program is (mostly) an economic agreement. ”Ten punches and the next one is free.” “Five percent off future purchases.” “One point per dollar spent.” It all adds up to the same story: sign up and come back, and in return we’ll give you a small discount (in many cases so small it is eclipsed by existing coupons). While catnip to bargain hunters, our instincts tell us many consumers are engaging simply because it’s the economically rational thing to do (why not save a little money?). Loyalty programs need to evolve beyond pure economics. They need to begin to recognize the power of emotion in the equation. For instance, how many major loyalty programs allow the cashier to welcome the consumer by name? The strength of social reinforcement in games like FarmVille tells us this recognition is worth more than its weight in gold.
3. The program offers many rewards, but only one action. Imagine a game of chess made entirely of pawns moving one square at a time or Monopoly with nothing but passing Go. As a system designed to incentivize certain behaviors, loyalty programs are pretty one-dimensional. Yet, they all posses the basic building blocks of a more game-like experience. That means thinking carefully about expanding the actions available to the player. More actions means more decisions and more engagement as the player tries to maximize their upside (while also maximizing beneficial behaviors). In the absence of more ways to “play” a loyalty program, members may invent their own game on top of one (note the forums where frequent fliers share their relatively banal strategies for maximizing points).
4. The program has unintended consequences. Many airlines have moved to a model where checking bags costs money, unless you’re an elite flyer. The result? Hundreds of people trying to cram their bags into overhead bins that are routinely overloaded. This delays departures and costs airlines money. Turn this scenario on its head and you’d have overhead space reserved for loyalty members, and bonus loyalty points awarded to each cabin of people whose flight boards and deplanes faster than the airline average. Good loyalty design requires a lot of systems thinking, and keeping it simple doesn’t discount the complexity inherent in human systems.

What positive or negative trends have you seen in loyalty lately? What is your business doing to evolve its system to meet new consumer expectations? We’d love to hear from you.

It’s hard to predict the future, but we know the Web is no longer viewed through rectangular screens; it is now something that can be felt, touched, engaged with, and enjoyed via the interconnectedness of everyday objects. Here we share a few of our favorites.

Go ahead: engage with the the ambient network at your fingertips!

In Your Home: 

Lockitron

With Lockitron you can replace your keys with your phone. Their tech networks your home locks, allowing you to lock and unlock your doors from anywhere in the world. Not only offering the convenience of being able to unlock doors while you’re not physically proximate, Lockitron allows you to offer and revoke virtual keys, providing greater flexibility and control over who can access what, when.

[Full Disclosure, I’m an investor.]

Botanicalls

The plants in the Undercurrent office tweet when they’re ready for water. Yours can too. Botanicalls (recently acquired by MoMA for the permanent collection) is a simple set of sensors that registers the moisture of plants and lets you know when they’re running dry. Not only does it help those lacking a green thumb keep plants alive, Botanicalls also works to “open up a new channel of communication between plants and humans, in an effort to promote successful inter-species understanding.” Better yet, the sensor kits are DIY.

With Your Body:

UP

Despite some early quality control issues, we’re still huge fans of the UP bracelet. A new health product from the creators of Jawbone, our UP bracelets wake us at the optimal time in the morning, track our sleep on our iPhones, count our steps, and remind us to stay active.

Wi-Fi Body Scale

The UP bracelet is just one venture into the networking of health devices. In a similar vein, the Wi-Fi Body scales from Withings graphs out your weight, BMI and fat mass so you can access it from your smartphone or web browser anytime. (Check out their iOS integrated Blood Pressure Monitor, too).

With Your Car: 

Waze

A crowd-sourced traffic-fighting application, Waze is a great demonstration of the innovative solutions to problems (traffic jams) coming not from the incumbents (GPS companies, car manufacturers) but from the startup community. Download the application and you get plugged into a mesh network that provides navigation and real-time traffic updates, harnessing the power of the crowd to improve your journey.

On Your Bike: 

Copenhagen Wheel

The Copenhagen Wheel transforms your regular bike into a hybrid “e-bike” that acts like a mobile sensing unit. A project from MIT’s SENSEable City Lab, this simple bicycle wheel captures pollution levels, traffic congestion details and information about road conditions in real-time. This data can be shared privately or with communities — the more people using it, the better the information about your town or city gets.

The Web is no longer bound by the screen, but something to be touched, engaged with, and enjoyed via the interconnectedness of everyday objects.

Each of these projects demonstrate some of the potential and possibility of a networked future. What remains unclear is what happens when the collapse between offline and online worlds is complete. Will the proverbial dust ever settle? Will robots named Siri make us coffee and take our temperature when we’re sick? Will the next generation of youth carry keys? We love asking those questions, but even more, we love participating in the future as it unfolds — and we encourage you to join us.

And yet, you (or someone around you) thinks of the competition in a primarily direct way. Look at a tracking report. Which companies are included? Probably those companies that make exactly what you make, and go after exactly the same target.

Unfortunately, traditional understandings of “competitive set” don’t take into account the way the world works. As soft data becomes hard, and information about everything is broadly distributed, you’re no longer competing with fellow automakers, fellow vodka distillers, and fellow airlines. Market leaders in every category reset expectations for every company that aims to sell stuff to the modern consumer.

This means you have to rethink how you design your products, services, and experiences. You have to set your sights on being the best in the world, bar none. It’s no longer cool – or acceptable to shareholders – to be the best in your category. This isn’t just about “digital,” or “social media.” It’s about the way humans understand the world around them.

Why? Because people aren’t reading your positioning PPTs.

As people receive more input – photographs, advertisements, movies, tweets, packaging designs, even shipment notifications from FedEx – their hunches about brands become ever more informed and ever more sophisticated. Consumers don’t restrict their thinking to the other companies in your category, they compare experiences they like with ones they don’t. Put a tacit understanding of how retail is supposed to work (see Apple) up against a broken but similar system (see the Departures Terminal at JFK) and you have a problem in the minds of your consumers.
This is an old discussion, thankfully enough. It started at Harvard in 1903, when Philosopher Charles Sanders Peirce put forward three basic propositions that offer a logical way to explain human “illogical behavior”:

1. People don’t understand things until they experience them.
2. People use a set of perceptual judgements – created from their life experiences – to form perspectives through inference.
3. People’s internal hunches about new things are formed when they put together two or more perceptual judgements of disparate origin together to create a single insight.

What to do about it.

In other words, this rising mental tide threatens to overflow brands’ boats, rather than lift them along the way. But all is not lost. Here’s three ideas for how to move forward in the face of smarter, more intuitive consumers.

1. Brands compete not just with direct competitors, but with everything people come into contact with everyday. So learn what you can take from successes outside your direct competitors. Idea: build the Zappos of the banking industry, instead of trying to recreate Mint.
2. People and businesses are getting more connected, not less.Look to create internal connectivity where there was none before. Idea: put IT and Marketing next to each other; put your social team closest to your engineers; watch what transpires.
3. Design is the great differentiator. As more people see more great design, the desire for design goes up, not down. Idea: hire more and better designers; barring that, enroll employees outsidethe design function in a multidisciplinary design course. 

But if you only take one thing from this Dispatch, take this: Digital has fundamentally changed who you need to consider a competitor. With finite resources, a luxury watch consumer isn’t just choosing among pilot watches at a $2,500 – $5,000 price point. They’re also thinking about the new Macbook Air, and a down payment on that new BMW coupe that caught their eye.

Act accordingly.