Where is the gap to be filled in retail?

Where is the gap to be filled in retail?

Mar 8, 2019 | Customers, Marketing, retail

The range of retail format options is huge and multifaceted.

At one end of the continuum you have pure on-line retailers,  to full service bricks and mortar retail at the other, and everything in between.

It is the ‘everything in between’ where the development is happening, and the opportunity lies.

Apple ‘Zigged’ when everyone else was ‘Zagging’ and spent a decade and billions of dollars opening retail stores. While they are now the most successful retailer in the world on a turnover/square foot basis, the reason was more about brand building over the long term than just retail revenue. Brilliant.

Amazon has been the catalyst to the on-line gold-rush, but you have to ask yourself are they are retailer, or a data business first? They started as a retailer, simply using a different channel, but to enhance their position they have evolved into a data company that uses on line channels to sell and deliver product.  With Amazon Go, they have combined bricks and mortar retail with their data capabilities, which can only become more important as they evolve their purchase of Whole Foods.

Meanwhile, B&M retail is either hunkering down, cutting costs, and generally moaning about how on-line sales are cutting their margins, or investing in their businesses, some by increasing service levels, others by setting about ‘digitising’ to compete.

Any way you look at it, the gap is in the middle.

That gap will be rapidly filled by deploying digital tools already available, or in development, based it seems on two rapidly converging technologies:

  • Facial recognition, powered by our on line profiles and pattern recognition software, and
  • Location definition powered by our devices and GPS.

Amazon Go is able to recognise and record stock movements from the shelf to your shopping basket, and back, as it happens, and debit your card with the purchase. It is a small step to use facial recognition as you approach a store, or product category while inside the store, and match that with your previous purchase patterns to make exclusive, and immediate offers to you tailored to your history.   You do not need to be Amazon go to deploy the second part of that scenario, you just need the facial recognition and location data connected to your purchase history, and perhaps purchase intent identified by browsing history.

This combination of location, facial recognition, purchase history and browsing patterns will be the game changer in the current gap.

The question to be answered is how we as members of the public and consumers feel about this complete exposure of what has been to date private. On the one hand we seem to want the convenience and immediacy it can deliver, but on the other, remain very wary of offering up our privacy to the unknown forces that can tap the data in ways never expected or sanctioned.

However, I suspect the horse has bolted, and the gap will rapidly  be filled!

Photo credit: Kristian Dye via Flikr

Get stronger, then get bigger

Get stronger, then get bigger

Mar 6, 2019 | Change, Customers, Management, Strategy

Most businesses find themselves on the ‘get bigger or get out’ merry go round. Unfortunately, one of the characteristics of merry go rounds is that unless you hold on, centrifugal force  will throw you off.

Also, the faster you go, the more likely you are to be thrown off, and as you slip towards the edge, the momentum grows making it that much harder to reverse the trend.

The alternative choice is to get stronger, rather than just bigger.

This usually means you say ‘No’ to a lot of tempting, but short term ‘opportunities’ that will arise, as most will dilute the focussed and differentiated value you can deliver to your ideal customers.

The dual question therefore is: How do you get ‘stronger,’ and what does stronger actually mean?

To me, strong means a number of things.

  • You are commercially resilient,
  • Customers, employees, and suppliers are all aligned to your values and strategy,
  • You have a strong brand amongst your customer base who want what you have because you are the only one who has it, and
  • Your competitors employees wish they worked for you

In short, you have a ‘moat’ around your business that repels all boarders and pretenders, and resists the siren song that suggests the grass is always greener somewhere else .

When you have all that, you can get bigger, it will happen almost without you driving size, as the strength will attract suppliers, customers, and those great employees with energy and ideas. 

 

Time can only be productive, or wasted. Which will it be?

Time can only be productive, or wasted. Which will it be?

Feb 27, 2019 | Customers, Marketing, Operations

Time is our only truly non renewable asset, and it is absolutely finite. Therefore it makes sense to use it as wisely as possible.

In a management context, in measuring a process, time has two dimensions.

  • Clock time. Start to finish, how long does a task take to go from one end of the process to another.
  • Event time. How long does it take to go through the activities necessary to complete the process.

It might take a bank 3 days to process your loan application, clock time, but the event time may only be the few minutes it takes to check your credit history, current income and automatically calculate your ability to repay the loan. Event time.

In most cases, customers are only aware of the clock time, and when it extends beyond what they think is reasonable, they become cranky with you.

The difference between the two is the opportunity for improvement, and to ensure customers only get cranky with your competitors.

 

‘Brand Conversations’ are usually just a marketers wet dream.

‘Brand Conversations’ are usually just a marketers wet dream.

Feb 20, 2019 | Branding, Customers, Marketing

 

Brand loyalty and frequency of purchase,  are not the same thing, although we seem to act most often as if they were.

Sometimes we marketers believe our own bullshit, not recognising we are usually delusional, or at least subject to a severe case of confirmation bias.

When was the last time you actually came across a customer who was so loyal, they wanted to ‘have a conversation’ with your brand?

Perhaps they were just shopping around and wanted a ‘conversation’?

Never, right?

Yet the term is used often as we indulge ourselves in developing marketing collateral.

Frequency of purchase, read loyalty, can be the result of many things, awareness, market share, delivering better distribution, price, shelf position in a supermarket, big advertising budgets, and so on.

Only when you significantly increase the price, and some customers stick like glue, or  go from retailer A to retailer B for the single reason of being able to buy your product, do you have real loyalty. Even then, it is likely that rare, wonderful customer could not be bothered having a conversation with your brand, at the risk of the men in white coats carrying them off.

Even the exceptional brands, Apple is one, IBM used to be another, a deli in Flemington, Sydney, is another, known to a relative few who simply would  not go anywhere else, do not have conversations. 

Nobody in their right mind tries to have conversations with these brands.

They do have conversations with employees of the companies that own them, as they seek information, pricing, availability of spares, after sales service, and all the rest of the things we need, but nobody has a conversation with the brand.

Except in the mind of marketing dreamers.

They have conversations with people, your employees, their friends, and friends of their friends, people they meet in supermarkets and service facilities, the list goes on.

The real key is to ensure that when your brand is spoken about, in whatever context, people are telling others of the value delivered, the problems solved, and that it ‘delivers’.

Forget the frills, jargon, and self delusion, it is a tough world out there, and your product needs to perform as promised, then people will talk about you.

Header cartoon credit: Tom Gauld New Scientist.

Finding victory over the deceptive demons of the marketing mind

Finding victory over the deceptive demons of the marketing mind

Feb 13, 2019 | Communication, Customers

 

Years ago I heard the great social researcher and author Hugh McKay describe every persons view of the world as the sight they see from behind the bars of their own experience, background, training and ideas.

The more developed are all these barriers, the more and thicker the bars between you and the outside world.

For marketers setting out to engage those who are most unlikely to be like them, this creates a dilemma.

How do you remove the bars, and see the world as your prospective customer would?

The demons in your mind will try and convince you that the world is as you see it, and at the very least, they will allow only a modest number of modifications without a significant level of discomfort to you.

Human beings connect easily to those who are most like  them. This is a unifying factor of evolutionary biology. It ensures that as we evolved, the small communities in which we evolved could be secure, or at least as secure as possible from the beasties lurking in the undergrowth.

While we may understand at a logical level the nature of those we are setting out to influence, at a primal level, we struggle to align our thoughts and words to theirs, we remain wedded to our own instinctive patterns and prejudices.

We all value truth, love, and life, but the means of expressing those values will be different. In understanding and relating to the differences, despite our own deeply held views, lies the marketing gold of true empathy. It all comes down to the language you use. Not just the verbal one, which is  the default, but the whole range of non-verbal channels, which according to many studies contributes more than 50% to the interpretation the receiver makes of the message.

Trying to sell renewable energy technology to someone who believes fossil fuel is the only answer to the consistent delivery of baseload power is challenging, as is trying to convince a conservative Christian that same sex marriage is OK.  

Overpowering that lurking demon that demands you see the world of your customer in a particular way is fundamental to being successful.

 

Photo credit: Sculptures lurking the shadows collection

 

 

 

How to find the ‘Zig’ when others are ‘Zagging’.

How to find the ‘Zig’ when others are ‘Zagging’.

Feb 11, 2019 | Change, Customers, Leadership

 

Being a part of the herd may be comfortable, but it is rarely sustainably profitable at levels greater than the cost of capital.

Finding points of differentiation, the means by which you can be distinctive preoccupies most thinking marketers, those factors that customers value that attract them to your offering rather than going up the street.

It also means, by extension, that you have made decisions about the nature of the market segments or niches that you wish to serve.

By definition, if you are setting out to be all things to all people in the hope that you will not alienate anyone, you cannot also differentiate, as it means that you are not distinctive in some meaningful way that adds value to specific types of customers.

Differentiation covers more than the value proposition and copy on your website, it follows through to the visual elements of your branding, and most importantly, the behaviour of your employees, channel partners and stakeholders. By reflecting the few factors that will make those ideal customers react to your differentiated offering in a niche they inhabit is a valuable building block. Everyone is familiar with the  cliché ‘a picture replaces a thousand words,’  which is never truer than when communicating a differentiated offer to specific group of users in a defined market niche. A graphic artist will call it a ‘Visual identity’ and it is worth the investment to refine it.

One of the best known ‘Ziggers’ is the recently deceased Herb Kelleher, co-founder and CEO of Southwest Airlines. Southwest retained an unbroken 43 year record of profitability in an industry that had wild fluctuations in profitability, and many of those airlines that set about killing Southwest in the early days are themselves now history, like Pan Am, or in and out of Chapter 11 like United.

Southwest focused on simplicity and their customers. When others employed spoke and wheel routing, they went point to point, as others added services like allocated seating and differing classes, Southwest did not, and they flew just one type of plane (Boeing 737) , making servicing easier, and while everyone else went to war with their employees, Southwest turned theirs into apostles for their employer.

Differentiation is more than being different, those differences must be of sufficient value to some customers, that they would  not go anywhere else.