Jul 21, 2014 | Branding, Change, Marketing, retail
It is fascinating to watch the evolution of the marketing of the two retail gorillas, Coles and Woolworths.
It is clear what they are doing, setting out to engage consumers with the freshness, range and provenance of their produce, and selling consumers all the packaged goods they need on the way through the stores. Their strategies are working, but more importantly, they highlight the depth of the opportunity for those few independent retailers left alive, and points to the way the more fragmented food service, ingredient, and emerging home delivery and farmers markets should be marketing themselves.
Coles and Woolies remain mass retailers, vulnerable on the edges.
A few years ago Woolies were undisputed heavweight champ, Coles the belted contender with no hope, but how things can change with a new trainer. Coles has been rejuvenated, and whilst their financial results have been hugely improved, they have a way to go to catch Woolies, but in the marketing stakes, they have taken the lead.
The sponsorship of “Masterchef” was a masterstroke, and they have followed up and leveraged the success extraordinarily well, with Woolies just starting to respond by buying Jamie Oliver to shape up to Heston, Curtis, and Status Quo (I was young in the 70’s) and a massive and very well co-ordinated marketing budget. Bit of an uneven contest.
From a consumers perspective, increasingly their choices are limited to brands the retailers control. Wether they be Coles new “Heston Blumenthal” brand, Woolies “Jamie Oliver” brand, or one of the various other housebrand versions at differing price-points, and pack configurations, they are all housebrands.
Suppliers of packaged proprietary brands have been progressively squeezed out, and those left are mostly sourced via global supply chains rather than manufacturing domestically, where almost nobody is left standing.
Change always starts at the fringes, as we have seen time and again over our history. Change is happening now in the food value chain, but at the fringes. Organics, local produce, micro suppliers of almost personalised products, restaurants differentiating on the basis of seasons and local supply, “pick your own” farmers markets, food tourism, various home delivery services, all happening outside the supermarket, some pretty basic marketing communicating the differentiated offer.
Jamie and Heston can take their money to beat each other up in the ad breaks of the nightly news. The increasing number of us who really care about what we eat, will go to the local blokes who genuinely care about what they deliver to us, and buy from them.
Jul 8, 2014 | Branding, Customers, Marketing, Small business, Social Media
Success does not happen by accident, it comes from hard work, knowledge, insight and experimentation. In the case of websites there are almost a billion websites live (866k) in July 2014, the billion mark will probably be reached by the 4nd of 2014. This is from the first site, being put up by Tim Berners-Lee in August 1991.
This is a pretty useful universe from which to draw lessons, and we have learnt a lot about what works and what does not.
What works:
- Content that is Interesting and engaging and targeted for a specific group of people will attract their attention, rather than content that is more general in nature .
- Attractive, eye-catching design is essential. Humans are visual animals, design is fundamental to attracting and keeping attention. The more research we do in this area, the more we understand the basic rules, and they are rules that have applied from the dawn of human development. Disregard them at your peril.
- Simplicity. Also essential is a design that enables visitors to find the stuff they are looking for simply and quickly.
- Speed. Low loading speed is penalised by search engines, but more importantly, is penalised by casual viewers, who simply move on.
- SEO. At least basic search engine optimisation is both easy and essential, if you have a great site that cannot be found, nobody wins.
- Competitive. With almost a billion sites, the web is a competitive environment, and you need to be distinctive amongst your competitors. If you are selling machine tools, you need to look like you are the expert in machine tools, not real estate or life insurance, and the relative merits of your site to those of your competitors are important.
- Be there to help, rather than overtly flogging something. Your website is the front door to your business, make sure it invites people in, rather acting like a tout in a sideshow, and alienating almost all who pass.
What does not work, in a word, lots. Complicated, messy, poorly targeted, overtly sales driven sites that lack humanity. Just trawl through the sites of most of our federal governments agencies and departments to see some great examples of what not to do, while trying to be all things to all people. The easiest way to construct a list of “no no’s” is to do the opposite of the list above.
If you follow these simple guides, at least you will be on the right road.
Jun 30, 2014 | Branding, Customers, Marketing, Small business
www.strategyaudit.com.au
One of the most common questions I get is how you get away from competing on price.
A couple of things are common in the situation that leads to the question:
- Someone else has control of the value chain. This is often the case with an FMCG product. In Australia two chains have 75% market share, the supplier, even to the MNC behemoths can only watch as they set the retail price, shelf position and category definition.
- The questioner has not spent the time and brainpower to consider what really matters to the customer. They have therefore failed, or chosen not to to make the hard choices that are central to building a brand.
Back to the Australian FMCG situation, as it relates to produce. Coles and Woolworths do not stock any proprietary brands at all in produce, just store branded product. The producer therefore has no control at all about what happens in store, but they do have a choice: to build a brand in alternative channels.
In some produce categories, hard vegetables, for example, the chains have close to the FMCG share of 75%. Carrots and onions seem to be pretty commoditised, but other categories like sensitive summer fruit, mangoes, stone fruit, and berries like strawberries and blueberries, have a far larger share in the alternative channels simply because the state of the product really matters to consumers. The 17 year old casual in Coles after school does not care much about the sensitive nature of the strawberries, but the greengrocer often does, the product matters, so they make decisions based on what matters.
Not every consumer will care enough about their strawberries, but perhaps enough will to make the development of a brand worth the effort, time, risk and cost.
When you accept that it is only price that matters to consumers, you have made a key strategic choice. That choice is that you will not care enough to find out what else may really matter to consumers sufficiently that they will make their purchase choice on a basis other than price.
Things that matter are usually beyond the physical dimensions and capabilities of a product, they are the stories that make the difference.
Why is one toaster worth more than another, they both toast bread, but perhaps one is just a tool, the other a piece of kitchen art based on the stories of the designer.
In simple terms, Focus on what really matters
Jun 16, 2014 | Branding, Marketing, Sales
A journey evolves
One of the most memorable, and biggest mistakes I made as a young product manager was to redesign a pack.
The product was an old fashioned, relatively low value product on supermarket shelves, it had a small niche to itself, and the sales ticked over, pretty much unaffected by promotional activity of any sort.
The pack was truly horrible.
Over the years , as suppliers of the display box had come and gone, the original photo had morphed into a messy amalgam of unrecognisable shape and conflicting colour to the point that it was not easy to recognise what the product inside might be, and if you did, it seemed unlikely to me that any reasonable consumer would consider buying it.
So, I did the obvious thing, at least it seemed obvious.
I contracted a designer, who did a great job of redesigning the pack, new photos, layout, recipe ideas, the whole five yards, so it looked clean, fresh, appetising, and with a bit of a flourish in womens magazines (this was the early 80’s) we relaunched the product.
The unexpected, unthinkable, happened.
Sales stopped, literally, dead in the water, nothing, nada, zilch.
Panic stations were manned, as while the volumes and profile of the product were low, the gross margins were outrageously high, and I had just shot the goose.
Not having any budget for research, I did the next best thing, which turned out to be the best thing, another lesson I have kept and reused, and reused.
I lurked around in supermarket isles for a while trying to talk to consumers of the product, and begged the field staff to do the same, to try to understand the reason for the abject failure of the new design.
It was rapidly clear that while consumers had no love for the old pack, they also thought it was rubbish, but they recognised it, bought it by habit, and when the design was so radically changed, they simply did not recognise the new pack as the same product, assumed their regular purchase, that had done the job for them well despite the packaging, was out of stock and moved on.
We changed the pack back, with a couple of subtle improvements and sales recovered immediately.
The point here is that I am sometimes faced with a client wanting to completely redesign their websites, they get sick of the old one, it is dated, unresponsive, not mobile friendly, and so on, and it seems like a good idea, and it almost always is.
However, I relate my pack story, and seek to persuade that many incremental steps that create an evolution of design that takes people with you is better than a big jump that risks losing some of the rusted on followers, those to whom you probably owe the bulk of your profits.
Now, you do not have to lurk in supermarket isles to assess the impact, you can conduct a series of A/B tests, to maximise the impact of the changes as the evolution journey winds along, a journey that should not end, just seek to deliver a superior experience.
BTW, the old product is still on the shelf, and having just googled it, the design seems fairly close to my memory of the brand, spanking new design of 30 years ago that so nearly truncated my marketing career.
Jun 9, 2014 | Branding, Marketing, Sales
Strategyaudit.com.au
We all know the world of sales has changed.
Consumers now have virtually all the information they need to make a purchase choice without any assistance from a “sales assistant”.
Before a significant purchase, consumers now review all sorts of web based resources that can deliver exactly the information important to them in making the choice.
It is exactly the same in B2B, sales people really only come in most of the time when the purchaser is almost ready to place an order and has all the information they need, except one bit:
The performance of the vendor and their product, by reputation, by past actions, and by undertakings about future performance
In the old days, choices were made on relative value, The purchaser had limited information, and really only chose between a few options.
Now they have enormous choice, and access to all the information that could possibly be relevant should they choose to look for it, so they are in a position to make a choice on the absolute value of the alternatives to them.
Changes the dynamics of brand building just a bit, and the old dilemma of functional priority is well and truly determined in favor of marketing, who now runs the sales show.
No longer is it about weight of distribution, advertising, number of sales people on the road, and relative value, it is about the absolute value delivered.
Now to be successful you need to be thinking about the balance between your sales and marketing investments, and making the most of marketing automation. Software and the cloud have changed the game, weather you are just using excel, the free Mailchimp and others, or going the whole mile with Marketo, Hubspot, or other enterprise solution marketing automation packages.
PS. September 2014. One of the really well known marketing writers David Meerman Scott, has written a new book called “The new rules of selling” and released a Slideshare of the same name on this topic. The book is worth reading, the slideshare is long, and summarises the ideas with great generosity.
Jun 4, 2014 | Branding, Collaboration, Leadership, Marketing
Debate and argument fills a vital role in all parts of our lives, it is what makes us human, this capacity to be able to think and communicate, rather than just react.
For an extended period with two different employers, I reported as marketing manager to a bloke with whom over time I developed a rapport that enabled us to achieve some great things, creative and commercial. We won awards, opened some new markets and redefined others, and importantly, delivered market share, brand credibility and profits to the employers.
Reflecting on the experience, now a long time ago, it seemed to me that there were 7 factors at work:
- Play devils advocate. We seemed to just fall into this habit of taking the opposite view of the one expressed, to debate the point by seeking the holes in the data, logic, and assumptions, irrespective of our own starting point. We usually ended up somewhere other than either of our respective starting points.
- Never allow authority to override or diminish the views of others. At no time during a debate was my view overridden by his organisational authority. From time to time after the debate was over, with some level of disagreement still present, he had to make a decision contrary to my expressed position. However, when those occasions arose, I was happy to go along, and execute he decision, as the process we had gone through was thorough, and my views had been listed to, and taken into account prior to the decision. Some form of “due process” had occurred.
- Recognise when you are wrong, and be very open about it. What more needs to be said? Very few things build respect quicker than someone being able to concede that they were wrong, and respect is vital for an open, non personal debate.
- Encourage absolutely open communication. This requires lots of trust, and goes with the point above, as respect is a vial element in trust. It is behaviour that engenders trust, not words. People watch the behaviour of others, and over time make a judgement about the level of trust they are prepared to offer. Trust is hard won, but easily lost.
- Openly question the foundations and logic of your own position. Being prepared to not just have others question your position, but being prepared to shoot your own scared cows, and we all have them, enables others to do the same thing with confidence that the commentary is never personal, and is welcome.
- Be prepared to enable, more than just allow, projects and ideas you disagree with to proceed. From time to time, when a project is allowed to proceed that may fail, and the “boss” thinks failure is likely, but gets behind it the impact on the creative energy is enormous. I recall one project that would completely disrupt the category the launch was aimed at, was allowed to proceed on the basis of my instinct. We had done lots of research, tested to the wahzoo, but this was a genuine innovation, something consumers had not seen, so asking them what they thought was encouraging but inconclusive, as they had no actual context against which the idea could be judged. There was considerable capital investment involved, and the “boss” went in aggressively to bat for the project, whist quietly being less than convinced. For an organisational subordinate to have that level of support is enormously empowering. Luckily, the launch was an enormous strategic and financial success.
- Be prepared for failure, but be determined to learn from it. We learn more from than we do from or success, so being prepared to experiment, adjust assumptions and try again is fundamental to learning. As part of the preparation for the launch referred to above, I had a range of plans prepared that would ensure that in the event of failure, the financial losses would be outweighed by the organisational learning that occurred. This was just good prudential management practise, and fortunately those plans were not necessary.
An unusually long post this morning, glad you go this far. It was triggered by a post I read earlier in which Ed Catmull, CEO of Pixar reflected on the reasons for his creative success. Many were reminiscent of mine, and his notion of a “brainstrust” is extremely attractive.
Such is the source of blog post ideas, a spark, combined with personal experience. This answers one of the questions I am often asked as I continue to find stuff sufficiently interesting to me, and hopefully to a few others, to post.
