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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The Truth about Target (great people, great store)

Posted by on May 14, 2014 in Brand Value, innovation, Inspiration, Leadership, Learning, Target, Vulnerability | 0 comments

Yesterday, Target CMO released a LinkedIn Influencer post titled “The Truth About Target”.   The Truth Hurts (via EVP/Chief Marketing Officer of Target, Jeff Jones) I was fortunate to work very closely with Target on some new innovations, and it prompted me to want to share my own personal experience with them. At the beginning of the relationship, a colleague in the industry described the culture at Target headquarters to me this way: “It’s like the movie Gattica, everyone is really smart, really attractive and a little bit afraid.” Walking through the very stylish hallways, admiring the beautiful artwork and seeing so many seemingly very young and attractive professionals in stylish, formal business attire – especially in those early days – I had no reason to believe that he was wrong.  I had visited many other retailer headquarters, and Target is definitely a different experience. But the truth is that all cultures have people who are just trying to survive and the people who are trying to climb – they are usually the politically savvy and or just below the radar screen – and because they are sensitive to either not standing out, or not standing out in the wrong way  – yes, they are a little bit afraid and they want the people around them to be as well. Ever heard of “not rocking the boat”? Know anyone like that at your own company? So, yes, Target has that cultural dynamic – because all companies do – especially big ones with strong, opinionated leaders…and even more so, usually, when companies have had a long run of success and factors other than intelligence and guts become career-boosters. But my personal experience with Target was that there were an above average number of innovators, and trail blazers  – especially some exceptionally smart and committed young people – willing to take a stand, make a claim, take a risk – because they believed in themselves, because their superiors at Target believed in them and because Target was giving them a chance to create something new and different and exciting. Our mutual mission, when working together, became figuring out this … “What can we create together that Target cannot do alone and that Catalina cannot do with any other retailer?” We reminded ourselves regularly that if we, together, can’t figure that out – we’ve individually, personally missed a huge opportunity to advance the field we all loved and had all chosen for our career.  It’s been my experience that not everyone rises to that kind of challenge or finds it stimulating or exciting, in fact – it’s rare – because the “what’s in it for me” isn’t clear or guaranteed. There was a...

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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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