Retailers Competing with Amazon: Lowe’s Foods

Posted by on Jul 12, 2014 in Amazon, innovation, Leadership, Retail Disruption, Strategy, Vulnerability, Walmart | 0 comments

Found this example of a brick & mortar retailer trying to do what Amazon & Walmart are doing – playing to their advantages, in this case – the fact that they have a physical, multi-sensory experience to offer and real humans to facilitate it. I’m not 100% certain it will translate into higher Share of Wallet, but their approach is on the right track … and that’s the key, when you are willing to to risk failure – you’ll try more things – and you’ll find success faster. Retailers Compete with Amazon: Lowe’s Foods This is a follow up datapoint to two previous posts: Amazon vs. All Other Retailers: Is It Really An Unfair Fight?   and   WMT vs. Amazon: War as a Catalyst for Innovation....

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WMT vs. AMZN: War As a Catalyst for Innovation & The Implications for Grocery Retail

Posted by on Jun 18, 2014 in Amazon, Digital Coupon, Digital Strategy, Loyalty, Online Grocery, Retail Disruption, Strategy, Vulnerability, Walmart | 0 comments

War has always been a great catalyst for technical innovation. And in this particular war, a lot of reinvention is happening as two of the biggest players in the competition for consumer share of wallet are duking it out, big time.  Great rivalries also redefine what is possible, break records, change the rules of the game. See these two recent events:   1. Walmart Uses Rivals’ Discounts to Fuel New Loyalty Program  This is brilliant because: Only Wal-Mart can do it, it builds off of a core strategic advantage…the low prices they are able to secure from suppliers due to their size/volume. It’s a way for them to capture real time pricing info of competitors quickly and efficiently (something AMZN has been doing for a while, and built upon further with their app below). It’s a simple value proposition that naturally evolves into a new level of relationship with their customers…building their digital engagement to higher levels. FYI – Most brick & mortar retailers see digital customer engagement between 5-10% – considering both initial opt-in and ongoing frequency of engagement. As a defensive tactic against the coming ecommerce evolution, all retailers need to be strategizing about how to improve that metric now. Also, for your info, just promising “coupons” has already been tried, by almost everyone and has strong but limited appeal. To get bigger, you must thing broader – as WMT has done here. 2. Amazon just unveiled a new smartphone called the Fire Phone with a Built-In Showrooming App.  If you throw out,for the sake of argument, whether the phone itself is going to be successful or not – the move to include a built-in showrooming app is a critically strategic piece of information for us in this space and the approach is brilliant because: Only Amazon can do it, it builds off of a core strategic advantage…the ability to be everywhere, carry everything and adjust its price “on the fly” based on current price/market information (something brick & mortar stores are going to have to figure out how to do, if they want to combat showrooming attrition). It’s a simple consumer value proposition that is also, a way “into a new level of relationship with their customers…building their TACTICAL, ON-SITE engagement to new levels. If they can get 8-10% of their digital customers to use the showrooming app, the would be huge…an excellent example of usurping a competitor’s advantage to become your own. But what’s important is not the specifics of what these two companies are doing, what’s more important is HOW THEY ARE PLAYING. These are NOT “play nice” moves, and if you – or your team – are hesitating to take action because the path is not clear… let me...

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Amazon vs. All Other Retailers: Is It Really An Unfair Fight?

Posted by on Jun 2, 2014 in Amazon, Digital Strategy, innovation, Leadership, Loyalty, Online Grocery, Online Marketing, Personalization, Retail Disruption, Strategy, Target, Technology, Walmart | 1 comment

              I have been pondering this quote from famed author James Patterson, which you may have seen: “Amazon seems out to control shopping in this country. This ultimately will have an effect on every grocery and department store chain and every big box store and ultimately put thousands of mom and pop stores out of business. It sounds like a monopoly to me. Amazon also wants to control bookselling, the book business and book publishing. That’s a national tragedy. If this is the new American way, it has to be changed by law if necessary.” While I understand the frustration that Patterson and his publisher must feel about their lack of leverage against Amazon in negotiating retail price, it would be a greater national tragedy for government to step in and legislate – any more than they already have – an unnatural competitive advantage for brick and mortar retail. Yes, Amazon is out to control shopping in this country. The only way they can do it is by finding better and better ways to serve consumers. Yes, “we” shouldn’t allow Amazon to control shopping in this country. But brick and mortar retailers have an advantage, and should not allow a lack of creativity or fear of failure to serve as an excuse to go whine to Mom & Dad (er’ the government) that someone isn’t playing fair. We should prevent Amazon’s dominance by… (revolutionary thought)… GETTING BETTER AT SERVING CONSUMERS! Brick & Mortar retail has the advantage of proximity (75% of all retail spending occurs within one mile of the consumer’s home, not online), the advantage of “I want to see it before I buy it”, the advantage of “I want to take it home with me now”, and – theoretically at least – the advantage of human touch. Amazon  (and Google Shopping Express and eBay Now and others) are investing aggressively and thinking creatively about how to erode the first three advantages – but what about the last one? How important is the human in retail? It used to be very important, before the age of Big Box and Discount Retail. Before chain retail the shop owner and his family – they were the brand. They gave personal, knowledgeable service. They were the epitome of personalization and high touch. This is what actually got me hooked on marketing technology – the possibility that technology held to make that epitome of the shop keeper/consumer relationship actually efficient. I wonder now, if we marketing technologists and our love of data and analytics have created  more distance than we’ve closed – especially when I read that 52% of consumers believe that shopping is too impersonal (mediapost)....

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Is Tech Eroding Consumer Loyalty? (Absolute Value)

Posted by on May 15, 2014 in Amazon, Brand Purpose, Brand Value, Branding, CPG, Digital Strategy, innovation, Leadership, Learning, Online Marketing, Retail Disruption, Strategy, Target, Walmart | 0 comments

Itamar Simonson and Emanuel Rosen have me thinking differently about the components of  brand value and how “consumer loyalty” is derived. I thank them for that – in over 20 years of working and thinking in this space  I rarely, rarely say that  -original thought is so hard to come by, especially in a space where everyone is kind of an expert, because everyone is kind of a consumer. Yes, I understand the role of brand value to brands – it creates consumer demand for their product which increases leverage with distributors and retailers which, in turn, drives both sales and profitability.  And I have been aware of the trust factor for the consumer, you want to trust that the values you ascribe to a brand exist whenever and wherever that brand appears (consider Target’s brand characteristic of affordable style, WalMart’s brand of everyday low price). Having spent some time in Bulgaria, in 1998, just as it was coming out of decades of communism and finding its way into free market marketing, I also appreciate the role that having different “brand values” plays in a society . When you don’t have consumer choice, you don’t have brand value – and so, to me, being able to create choice – with brands that have different values – as a means of consumer self-expression and empowerment – is also an angle I understand. But there is something about the way this article breaks it down that is intriguing to me. It will take a while for the seeds they planted in my brain to germinate into something really useful, but here is what they have me ruminating about: What is the Role of Brand Value in Consumer Loyalty?  (or I would say creating “consumer demand”) Simonson and Rosen essentially say the value is “quick reference”.  Consumers either don’t have to do the research, or don’t have to do as much research – before buying – because they trust the brand, or more specifically what the brand means. They hypothesize that in an age of “almost” perfect information, – the research that used to be able to be “assumed” by certain brand value attributes, is now readily and easily available online. They conclude that, in this case, it is the “absolute” value (not the relative “by association”  brand value) of the product that is most important. As I try to break this down, I think that is probably true in some instances – particularly where the fact is easily verified or quantified. Examples of this would include quality, safety or some other quantifiable standard or feature (like gluten-free, or organic  ingredients). But even then, the value is relative – the consumer now trusts the online recommendations more than...

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Upstream Insight on Bluetooth LE/iBeacon (for non-techies)

Posted by on May 3, 2014 in Amazon, Big Data, Bluetooth LE, Consumer Data, Consumer Privacy, Content Marketing, Digital Strategy, iBeacon, innovation, Learning, Loyalty, Online Grocery, Personalization, Retail Disruption, Strategy, Target, Technology, Walmart | 0 comments

There’s new technology out there creating some buzz. It’s simply the ability for a one-way communication  to occur between your smartphone and one or more radio frequency emitting device(s), called “beacon(s)”.   The capability is enabled by Bluetooth Low Energy  (aka Bluetooth LE). Common Base Use Case for Retail: If a retailer places beacon “123” in the cereal aisle, then the beacon can help a receiving device (like your smartphone) know two things: 1) How far away from the cereal you are (and, potentially, are you nearing or exiting) 2) Whether or not you are in the cereal aisle (and, potentially, how long have you been standing there) What your smartphone (or any other receiving device) then does with that information is a function of the application you have downloaded on the phone – with the most frequent ideas bandied about including the triggering additional product information, coupons or videos.  Dave Peterson, senior group manager of digital vendor marketing at Target, is looking at allowing brands to deliver promotions and messages to consumers through iBeacon while in a Target store. (source: MediaPost) What is making the functionality buzz-worthy is that it has all the hallmarks of a classic Clayton Christensen-like disruptive innovation, with the potential to revolutionize many  value propositions – from the supply-chain to health and wellness applications (are you wearing a FitBit right now? If so, you’re already using it. ) As for Retail Marketers, there are two features which make this technical capability particularly exciting:  1. Cost. Bluetooth LE makes location-based solutions, services and marketing not only more accurate, they are extremely affordable. The beacons, which essentially transmit a continuous messages that says “here I am”, cost very little, between $3 and $5  (actual cost of components) and are powered by common, inexpensive batteries. (Estimote sells a developers package, which includes 3 beacons, for $99 on their site today.) 2. Lower barriers/dependence on consumer compliance. Most exciting to retail marketers is that it removes a significant amount of dependance on consumer compliance to enable location-triggered marketing – which should, theoretically, increase the scale potential of location-based marketing solutions. The consumer no longer has to remember to open the app on their phone when they enter the store. As long as the consumer has downloaded the retailer’s app at some point prior (and are allowing notifications from the app), the app can open or trigger a notification (or video, or coupon) automatically when the consumer is near a relevant beacon. Still to be figured out… 1) Will engagement decline after initial use or will consumers love it?   How the technology is used to improve the in-store consumer value proposition will be critical. Personally, I haven’t seen or heard of very many use...

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