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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Consumer Data Acquisition: What’s the difference between a ‘bribe’ and a ‘value proposition’?

Posted by on May 12, 2014 in Big Data, Brand Value, Consumer Data, Consumer Privacy, Digital Strategy, Learning, Online Marketing, Personalization, Retail Disruption, Technology, Vulnerability | 1 comment

Do you think this value proposition is uniquely of interest to high-end consumers? They claim that it’s their lack of affiliation with any particular brand that builds trust.  What does that say about brands, are they inherently untrustworthy because they want to market to the customer?  What other characteristics are important to building trust between consumers and the companies they do business with? Is 150,000 customers a lot? Why is paying consumers for their personal data called a “bribe”? Want Your Customer’s Personal Data? Bribe Them. (via Inc.)   Susan O’Neal Gear has over 20 years of experience at the intersection of consumers, marketing and technology. Passionate about all aspects of a consumer’s relationship with brands and retailers, we’re spending the next year looking for new, groundbreaking thought leadership  – if not disruptive solutions – with the potential to redefine the parameters of consumer loyalty. If you also want to see some game changing happen -then follow Upstream Insight, contribute your voice, share this post…do something! ...

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Don’t Panic! Personalization in Perspective

Posted by on May 9, 2014 in CPG, Digital Strategy, Learning, Loyalty, Online Coupon, Online Grocery, Online Marketing, Personalization, Sliderpostings | 0 comments

The bandwagon of the day is PERSONALIZATION. Everyone who is anyone is modifying position statements and priorities to be a world-class leader in it. But before you launch your organization into “must have a proprietary personalization engine right now” panic mode, please consider the following: 1. Personalization – as a means to organize how you present content – is an optimization tactic, not a strategy. Your survival as business and your ability to effectively serve your customers might not depend on having absolutely the best, proprietary personalization engine in the galaxy. Personalization may not even make sense for you. 2. Personalization is most effective if you have thousands of “quality” content units for it to prioritize – the more the better. If you had the best personalization engine in the galaxy and it was only personalizing a hundred units of average content, there might be little to no optimization effect at all on your business (depending upon the media you are personalizing on). Think about the number and variety of content units Amazon is choosing from to create your personalized experience – how would you grade them? How does your relevant content database compare to that of Amazon? 3. “Freshness” of content also impacts the effectiveness of your personalization engine. Facebook, Pinterest, Instagram and select news/curation services have arguably the best personalization potential because their inventory of content is both vast and continously fresh. If they didn’t have both, they would never be able to sustain the frequency of consumer engagement that they do – with or without personalization. If you have or are trying to achieve frequent engagement, without either a vast or fresh inventory, the impact of personalization will be less impressive and possibly even detrimental to your brand. Online dating sites have this challenge if a new member logs in too frequently – satisfaction and engagement will decrease. This isn’t because their matching (or personalization) algorithm is bad, it’s because they don’t have enough continuously fresh inventory to sustain the value proposition. (Insert snarky comment about online dating here, if you wish.) And here’s another thing about frequency – if you’re only going to rely on derived data (i.e. purchase or browse data or other insight proprietary to you), the more frequent the visits the better that data set is. If a consumer engages with you weekly, you can make conclusions about them with much greater confidence than if they only engaged with you quarterly – for example. 4. The personalization algorithm, by itself, is unlikely to ever be a point of sustainable competitive advantage for most companies – unless your proprietary algorithm is also pulling from a proprietary (meaning nobody else has anything like it)...

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Why is CIRCULATION REVENUE consistently the ONLY CATEGORY TRENDING UP when stats about Newspapers are released???

Posted by on Apr 29, 2014 in Brand eCRM, CPG, Digital Coupon, Digital Strategy, Load to Card, Loyalty, Online Marketing, Printable Coupon, Retail Disruption, Strategy | 0 comments

  Why, why, why is CIRCULATION REVENUE consistently the ONLY CATEGORY TRENDING UP when statistics about Newspaper Ad Revenue are released??? The Decline of Newspapers Hits a Stunning Milestone This is a rhetorical question, I know “why”… sort of…I just don’t like the answer. Summary of the actual U.S. Newspaper Industry report on its own health… The headline is that there is, once again, no headline. Consistent with 20 YEARS (?!?!?!?) of reports from similar sources…. “revenue trends were largely unchanged” …which remains consistently surprising given how few consumers read or buy the newspaper anymore. Overall decline in ad revenues was consistent with prior year, about 6% each – mostly driven by decline in print ads. Hardly a cliff. How much innovation could actually be happening if year after year, one of the biggest channels for RETAIL & CPG MARKETING  (nearly $11 Billion annually!) consistently reports that things are  “largely unchanged”???    Are we RETAIL and CPG MARKETERS being boiled really, really slowly – like frogs – so we stay comfortable and don’t jump out of the pot?   I KNOW we are a smart group of people, so I try to unpack it… Circulation revenues increased 3.7% Digital only circulation revenue up 47%. Print + Digital BUNDLES are up 107%. Print only circulation revenue is is down 20%. Umm…so, are they printing more circulars or fewer circulars?  When offering a Print+Digital Bundle, how is the discount weighted? I’m guessing that the part with the low to no variable cost (digital) may be bundled into the print for free, which means if we’re being honest with ourselves, we’re not REALLY being all that adventuresome and innovative, are we? COME ON RETAIL AND CONSUMER GOOD MARKETERS!!!  If we want to really break new ground and innovate, we have to STOP DELUDING OURSELVES.  While we’re at it, we also have to stop doing the same thing online that we’ve always done in traditional media (i.e. digital circulars and pre-roll video of the same advertising we run on TV). The only logical conclusion is that there is INSUFFICIENT INNOVATION happening in our space.  The money goes where it’s always gone simply because IT. DOESN’T. HAVE. ANYWHERE. ELSE. TO GO.  At least it doesn’t have anywhere to go that the point of diminishing returns on ROI doesn’t time out earlier than the audience. What say you? What’s the most promising company or solution you’re seeing now? What are the issues we need to address?  Are circulars really ALL THAT and more? Is it really all in support of in-store merchandising? Susan O’Neal Gear has over 20 years of experience at the intersection of consumers, marketing and technology. Passionate about all aspects of a consumer’s relationship with...

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