Tuesday, July 31, 2012

Retail isn't About Shopping Anymore

What happened to shopping at retail?

Nicholas Negroponte once wrote...
You enter a store. You see something you like. You write down the product name and manufacturer. You go home and order it over the Internet. As a result, you didn't have to carry it, you probably got a better price, and you may have avoided sales tax.
The store in this scenario is merely a showroom. Have I just described the exception to tomorrow's retail, or the rule?
Except for that 'write down the product name' he got it about right.  In their third annual update on the future of something, PSFK highlights the new trends for retail that take advantage of technological changes since 1998.


The ideas center on one theme - make it easier to choose by blending the best aspects of digital and physical experiences. 

Thursday, July 26, 2012

Quantifying Evangelism

How should we look at mobile research?

A recent MediaPost article reported research sponsored by Greystripe that suggested mobile shoppers are more likely to be evangelists (as well as naysayers) than their traditional counterparts.   This conclusion was based on the number of people who posted reviews about their experience - 49% vs. 31%.  In addition, the results suggest that mobile shoppers are less price sensitive because fewer of them reported the use of retailer coupons - 71% vs. 94%.

I grew up in the market research industry so tend to think in terms of the validity of the results.
  • Who does the sample represent?
  • Do the conclusions reflect the data?
  • Can we extrapolate beyond the sample?
This research came from a self-selected audience who responded to an inquiry to participate from the sponsor's mobile ad serving system.  So, the 'traditional counterparts' are still engaged mobile users leaving us looking at only one segment of the shopping market.

The jump from 'write reviews' to 'better evangelist' equates an action with a mental state without understanding the reasons behind it.   Sharing opinions can be considered an aspect of evangelism, but it could also simply reflect the basic need for self-expression: "I post, therefore I am". 

The results do pose some good food for thought, but only within the context of who responded.  There is other evidence that suggest that 50% of US population has written at least one review; if that figure is correct then this sample is 'below average'.   On the other hand, Forrester's "Social Technographics" suggests that 37% of the US Adult population are 'Critics' (those who write reviews). 

In an example of the importance of the reviews Olery created an infographic on the hotel industry.  And because the data came primarily from TripAdvisor it isn't surprising to see the purpose of the trip to be for 'fun' rather than for 'work'.

And these issues are things the whole mobile research industry faces.   A recent conference sponsor on the topic posted a number of key take-a-ways.  Some of the key ones:
  • The industry is too young to have standards established yet and the likely leaders aren't necessarily interested in setting them
  • There is a thirst for innovation but there remains an addiction to what we've measured before
  • Entrants will have to prove the ROI while at the same time breaking traditional models 
It is a good time to be in market research....

Tuesday, July 24, 2012

Segment Based on How Consumers Choose Too

How do retailers segment their customers?

The National Retail Federation and KPMG do an annual benchmark study on retailing.   In this year's edition there is discussion of how firms segment their customers.  Here's a summary chart.
It is good to see all the usual suspects, starting with a consumer's transaction history and her preferences.   But in this day and age of channel blur, infinite paths to purchase, and self-expression there appear to be additional opportunities to better understand how consumers choose not just what they chose.
  • What touchpoints are used? In what sequence? For what purpose?
  • What types of content are consumed?
  • What media crosses their path, when?
Since satisfying growth objectives requires finding new ways to efficiently and effectively reach consumers,  we might want to consider focusing our segmentation thinking outward on the digital bread crumbs. 

Monday, July 23, 2012

Social Media is Passing the Turing Test

What happens when we can't tell if it is real or Memorex?

In this age of fragmentation we often use an adjective to qualify what segment we're talking about.   To take a few - print media, broadcast media, online media and social media - it is the adjective that helps us understand the goals, functions, cost models and conversion expectations.

But if we drop the adjective, we're simply left with 'media' - the paid placement of a message.   And in the digital era it is very easy to blur the distinction.   While 'social' started out as focused on human interactions, the technical underpinnings allow for much more.   In a recent article on Fortune about tweetbots, Ryan Holmes of HootSuite suggests a bit of moderation along the path to automation.   We know that targeting can go too far, but so can the creation of content and social posts.

Memorex Ad
And unlike like the Memorex ad it does matter whether it is real or just technology. Anytime we can write down the rules, we can automate the process.  This is where a lot of productivity gains come from.  And sorting thru the bizillion conversations to find the useful comments is clearly ripe for a technology fix.  And so is the scheduling side of things.

Back in the 1950's Alan Turing thought thru whether digital machines could imitate humans well enough to fool the panel.   This was an easier task than answering the question 'can machines think?'   The result is known as the Turing Test.

When it comes to social media we are getting close to passing that test - the auto-generated tweets and posts that pass as human.   While the advantage of scale is obvious care should be taken in how far we go down this path.

Tweetbots and the like could produce some unintended consequences.
  1. Social media will become just like TV media - lots of eyeballs but conversations are filtered
  2. People will move toward less business-centric avenues to connect.
  3. As the ability to connect becomes pervasive in newer technology, there won't be a need for a separate platform.
Maybe we should have stuck with the original moniker:  Social Technology. 

Thursday, July 19, 2012

Mobile is Not a Screen

Why does mobile marketing cause us headaches?

The future of marketing is literally in the palm of our hands - the smart phone.  But we have to rethink things; it is not just another screen.

Given all recent stats from just about every firm around, there should be no question about the impact of mobile on retail shopping.  True, it varies by category according to Deloitte reserach but the trend is undeniable: we use it to help us decide.

The result is a series of paradoxes we're not used to because it totally disrupted the path to purchase as we understood it to be. We're now operating in a world when...
  • More information from more sources is present at decision time not less because we don't need to wean out choices ahead of time.  
  • The ability to push messages first requires pull, activation or opt-in because this is personal not broadcast.
  • The content is not what we'd thought it would be (ads) but rather what they need (info) because that is what is actually important. 
  • Awareness and consideration may occur at the same instant because it eliminates the need for prior research.
  • The time and space distinction of channels has evaporated because there are no physical constraints on where it can be used.
  • Showrooming can lead to higher in-store conversion because consumers can recognize the offer as 'good enough'. 
So, let's stop thinking about mobile as the 3rd screen (NYT piece from 2007) for advertising but rather a decision support platform. 

Maybe we should design our content strategy like a dashboard....
  

Tuesday, July 17, 2012

Generational Shift: Buying vs. Owning

What if owning didn't require buying?

There have been a series of articles about the generational attitudinal shift among the Millennials toward shopping for cars.  First, the NYT wrote about the "MTVification" of GM where outsiders and upstarts are trying to infuse the culture and product line with insights about what younger people want.  They want the Apple Store not a car lot.   This was followed quickly by an article in The Atlantic that explored the topic further to explain why young people aren't buying cars.  Part of the reason is likely to be the desire to live in an urban setting.   Research into home ownership suggests that that bastion of success is becoming less a part of the dream.  And finally, John Dykstra wrote a piece this month in Fast Company that summarized the needs of the Millennials.

Simply put, this generation "doesn't want to buy stuff."  

Instead, they buy things because...
  • of what they can do with them.  Here, simplicity of lives reigns - particularly when you think  of it in terms of creating a seamless relationship with technology.
  • of what they can tell others about it. Again, technology has facilitated sharing to a level that makes self-expression an art form.
  • of what it says about a person by having it.  As life priorities and needs shift, the role of products changes with them.   Conspicuous consumption and freedom of the road have been replaced by a socially conscious and local focus.  
While it seems silly to state that products and marketing programs should reflect the times, sometimes it is hard to step back and glean the insights of generational shifts.  The challenge of adopting to generational shifts is not only on the product side, e.g. lemonade or denim color palettes, but also in terms of how we market.  The symbiotic relationship between consumer need and our solutions must be embedded in the way we connect with consumers.   Selling via interruption and intervention was used to reinforce the need to actually buy something, just ask the direct response folks.  But since technology allows us to do, share, and express without actually buying anything at all then a whole set of notions need to be reconsidered.

I think the point of these articles is to ask us to rethink the nature and benefits of ownership itself.  And in doing so we may come with insights into how to exchange value.

Time to talk to my son more, he's a millennial.  

Wednesday, July 11, 2012

Marketing IS Hacking

What do marketers need to do?

If we define a hacker as "generally referring to someone who challenges the existing order, most often using science, engineering, or information technology" in order to change it then we are really talking about marketers in the digital age.

The purpose of marketing is to change history by identifying growth opportunities in terms of markets, products, segments, etc.   Today, this is as much about leveraging technology (and the data it spins off) as it is about the human element.   In fact, about a year ago the post "Find a Growth Hacker" clearly tied hacking and marketing together at the hip when author Sean Ellis talked about that entrepreneurial drive to do what ever it takes to grow the business.

More recently, the term has appeared in connection with big data.  In a Mashable post earlier this month, Joseph Kelly talked about the need for data scientists and growth hackers inside of agencies.  These are the folks that figure out how the world works at its core, kind of like the Higgs boson, then put something new together from the parts so that they can make consumers' lives easier.

And it turns out that marketers have questions that need serious hacking:
  • What is the likely next step in a consumer's journey? - when she herself doesn't know.
  • How can we intersect a journey with interesting content? - for a person that we can't track.
  • What would help her choose? - when we don't understand her changing need states.
The challenge is that these questions require the independent, innovative, hacking mentality that doesn't typically fit within structured programs.  In this world success is measured after the fact, not guaranteed before. 

If your goal is to be an agile leader then hacking is required because the mantra is test, fix and try.

Friday, July 06, 2012

Retail Trend: Blend Instead of Separate

What does the future have in store?

Marketing Charts recently summarized research among retailers on what they see the world looking like in 5 years time.  While clearly written from a retail perspective, e.g. the first step along the path to purchase is to pick a place to shop, the scope of the discussion applies to beyond in-store behavior.  The sub-head says it all:
Omni-channel retailing is about giving customers a seamless, consistent experience whether it's in-store, online or through a mobile device.
To achieve that lofty goal the research suggests we must:
  1. Know who is shopping where and when
  2. Integrate physical and digital worlds (like IBM's test of augmented reality)
  3. Give associates the same level of information that the web site has
I can just imagine a team working to overlay the strength of data-based merchandising, think collaborative filtering in Amazon, on top of the traditional shelf-set or merchandising plan via proximity technology.  Fashion retailers are already doing similar things moving RFID from inventory control to helping consumers find sizes and accessories and creating a digital mirror to see how it looks.  

And all this produces new data upon which to glean insights on how to make the consumer's experience more enjoyable.

Tuesday, July 03, 2012

Marketing's Role: Simplifying Decisions

What should marketing be focused on?

A recent series in HBR begins to explore why consumers stay with a brand or product.   The authors conclude that it comes down to the way in which they make their choices.
The single biggest driver of stickiness, by far, was “decision simplicity”.
Product proliferation, media fragmentation, and continuous partial attention lead us to find short cuts to decisions.   Chris Anderson, editor of wired, once described a brand as a proxy for information.  And it is this message that resonates in the article.  The three key consumer needs are:
  • Trust the information they receive – providing recommendations by consumer advisors, ratings and reviews.
  • Learn effectively without distraction – simplifying the research process by offering clear and streamlined brand-specific product information targeted to each decision stage.
  • Weigh options confidently – making transparent buying guides and brand differentiated information easily available.
To be clear, this isn't just about producing feeds and speeds or feature checklists.  One must recognize that aspirations, risks, and needs sit behind every simple choice.